I guess it depends if 35mins is worth 3 rags, but it still doesn’t make sense that you get more than what you put in.
The salvage system has recently been giving back materials based on an items volume. This appears to be a side effect of that.
Lots of folks complain but so far nobody’s been bothered enough to fix it.
To be honest, I don’t think doing this is all that worth it. The time it takes to Create, dissasemble and, if needed, create more string from rags, makes just finding some zombie corpses and ripping up their clothes many times more effective.