Yeah, there's a video about it here: https://www.watercare.co.nz/home/about-us/what-we-do/wastewater

It mentions the screening that removes anything bigger than 3mm, including toys, passports, and cash.

This isn't my local one, my local had a massive failure recently and is a bit fucked so I can't seem to find the page they have on it, but the page also talked about screening off the solids and mentions toilet paper specifically. My local one also sends the biological solids (the shit) to landfill after water has been removed, which is different than the above one that is apparently using that to turn a quarry into a park.

And just to show it's not only here, the wikipedia page talks about screening as the first step too.

Toilet paper is biodegradable, and laws around it may also be because of the widespread use of septic tanks which will break down the toilet paper. But septic tanks only work for very low volumes. As mentioned in the above video, wastewater leaves 12 hours after arriving, so the process has to be very quick. You aren't going to want to pump toilet paper pieces out into the harbour where people swim and lay on the beach, so it's gotta be screened off and sent to landfill.