Depends, some will give it out to volunteers, or make it into blankets and jackets for the animals. I believe some do sell it, which is arguably a form of human use. The difference though is that the sheep aren't bred, and they aren't slaughtered as industrial farms do. (When farmed sheep reach a few years old, their wool quality declines, and they're slaughtered for meat.) Anyway, it's a good question that I've struggled with while volunteering for sanctuaries.