I have not tried this with ruined ammo yet, as I did not have any ruined by the bear trap which damaged it. I have only tried this with the shotgun shells and Winchester rounds I had in my pants, as only my pants and boots were ruined. I imagine this effect is produced by the process of continually re-averaging the item health of the smaller stacks which are being combined. I also imagine this works with all ammo, and not just the shotgun and Winchester rounds.