The waste heat flows out the cold side of the junction, through the heat sink, and is lost into the ambient air. You can't feed that heat back into the hot sid

The waste heat flows out the cold side of the junction, through the heat sink, and is lost into the ambient air. You can't feed that heat back into the hot side because it's been diluted into the air, and thus it's a lower temperature. You can't concentrate the waste heat by enclosing the heat sink in a small volume because that would eliminate the temperature differential across the junction. You won't gain much by making a stack of junctions with each one passing its waste heat to the next one. They effectively insulate each other, reducing the temperature differential across each one. There's an optimization opportunity here, but commercial junctions are usually already sold as a stack. Adding more layers gives rapidly diminishing returns at best. Thermodynamics is cruel.