I don't think LE ever believed or even implied (to anyone) that they thought there was a possibility Zahra's body had been put throught the wood chipper. I think that was all wild speculation by WSers. If her entire body had actually been run through a wood chipper, the dogs would have been going absolutely nuts. Wood chippers aren't designed to prevent small particles from being sprayed all over the place. They aren't like a giant HEPA-filter vacuum cleaner with blades. Stand next to a wood chipper that's sucking branches through and you'll get a powerful smell of wood, because tiny wood particles are being sprayed into the air as the chunks of chipped wood fly out of the chipper and land loosely in a truck bed or other open container. There is residue all over the chipper and the truck -- not particularly noticeable to humans, but millions of times the amount it would take a trained dog to alert on.
They may have thought the hit on the wood chipper indicated it could have been used to dispose of clothes, blankets, cleaning rags, etc that were somehow associated with Zahra's injury or death, and maybe even that there was a poorly thought-out attempt to get rid of the prosthesis by putting it through the chipper along with a big load of branches. But her body? There was never any such implication. And someone who has worked with wood chippers would certainly know that it would be an insane way to try to dispose of a body that police would end up searching for.