Waste Collection is a depot where Trucks can remove Waste from the Settlement. Waste can be dumped within Dumping designation or incinerated in a Burner, though this method of disposal will cause Air Pollution.
It decreases the Health of pops that the settlement is full of Waste, so you should certainly dump or burn it. On the other hand, Waste Collection does not alert at it is full. After that, a settlement is eventually alert when the settlement is full of Waste and Health is damaged. Loose Storage and its alert function are useful for getting alert in good time.