Under normal circumstances, the sentence:
「これはペットボトルを再生{さいせい}したものです。」
would only mean one thing which is:
"This is an object/thing made from recycled PET bottles."
to borrow your translation.
One would say this sentence by pointing, for instance, at fleece. Fleece is made from PET bottles, which is why it tends to be inexpensive.
Your other translation "This is the tool/machine that fixed/recycled the PET bottle." would not be a very natural one, if not entirely impossible. If that were what one wanted to say, one would use 「再生する」 instead of 「再生した」 instead (and perhaps also 「機械{きかい}」 or 「装置{そうち}」 instead of 「もの」 as well).
The Google translation, as usual and as expected, is just garbage. PET bottles are better as garbage because they turn into my jackets.