I don't remember getting an answer from the book on this although I could have missed it.
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I believe they die.
Either they died or got sent to another city.
My memory and the book
They are killed
They are sent to Decatur Colony to be tested on, if you don't know what Decatur Colony is, it is a secret research base that tests on people who fail the testing. The main inhabitants of Decatur Colony are failed experiments (Mutated humans).
During the testing for Malencia Vale, she said the thing that scratched and infected her arm, wasn't an animal, it was human. The failed experiments are what Cia encountered. For a long time, Cia thought if a candidate for the testing failed and got redirected they would die. As it turns out, candidates went to Decatur Colony to be tested on.
Decatur Colony was a secret and unknown colony.
It was a research base. The scientists there were sent to research mutations and how to reverse the effects of mutations.
The colony was close enough to the borders of the 4th stage of the test so they could release failed experiments.
^ Much better explanation. :)