I think it has something to do with the chemical treatment in paper pulp being degraded after one cycle.
The processed paper we used in the pellets had cardboard and even christmas wrappers in it. I used to have a sample that was multicolored.
The paper with wax does contain more energy. But because of food contamination, waxed paper products like drink cups are a biohazard and not considered safe for post consumer recycling without considerable refining.
I wonder if there were a way the bio-hazardous papers could be "scrubbed" as part of the pelletizing process. Perhaps preheating the materials in the auger to kill any remaining biotics. Then doped with an antibacterial to prevent later growth.