I got a slightly different story from my school friend, who spent his last school summer break working there.
In the middle of the 1960s, he had six weeks of unpacking crates, taking out the cameras and presenting them to the guys who tested them. Those that worked then went to the packing department, the rest went to the mechanics, who decided if they could be salvaged or not. This seems reasonable to me, because I had spent the previous summer holiday doing much the same thing at a warehouse in Holborn, which was the main importer for Soviet clocks and watches. They too had to triage the products and there were large trays in the watchmakers department, into which the "iffy" products were dumped.
The good news is that we both ended up with respectable amounts of cash for our drudgery!