That's referring specifically to the return envelope.

Appropriately challenged ballots will not be tallied and will remain in their return envelopes for subsequent proceedings and identification if necessary. Ballots which have not been challenged will be compared to the eligibility list, removed from the return envelope and the return envelopes destroyed. The ballots will then be commingled while remaining sealed in ballot envelopes. The ballot envelopes will then be opened and the results tabulated.

If they threw out the secrecy ballot envelopes that came with the ballot, then they have a problem.