The better question is what are YOU going to do with it? Engines work like pop bottles and old tv picture tubes. It is extremely expensive to buy new ones so the old pop bottles are cleaned and refilled. Picture tubes are disassembled and rebuilt. Car engines are disassembled, cleaned, inspected, measured, and rebuilt. You will be getting the engine that came out of someone else's car. Engines and many other parts are sold with a "core charge" added on to encourage the old part to be returned. You are not charged that core charge by the shop doing the work unless you want to keep that old part. That is rarely done.
It is standard procedure to purchase a rebuilt engine on an "exchange" basis. That means the price assumes they will be getting the old engine in return. Your mechanic is just following normal procedure.