> Now, water in Europe is recycled as well.

Not to the degree that they do in Israel.

> And even IFF that would be true, not using a running tap would save more water.

Agreed.

> What happens to the old/used bottles?

Crush them and put them back in the ground. Energy is more plentiful than water in Israel, it makes little sense to spend precious water to make glass. Are you worried about waste? Of all things glass is hardly a problem, it's impossible for us to run out of it, and it causes no harm if buried.

> Kosher ... will stay a bottle of coke ... If you consider Coke kosher .. refilled with the same stuff. I don't see how kosher comes into play here?

Coke is kosher, it's actually one of the very first commercial products that was certified kosher. They had to tell the Rabbi all the secret ingredients. https://www.jewishvirtuallibrary.org/jsource/Judaism/Kasheri...

Anyway the problem is that you don't know what they did with the bottle while they had it. Did they put other products inside it, and now the bottle is not kosher? Probably not, but it's a concern.

You can make the bottle kosher again by boiling it in water, but that costs you more energy.