I have made several rag quilts. I am on city sewer not septic, I may do this differently if I was on septic.
My machine (top loader) has a soak cycle that fills, agitates, but does not drain. I run an old strainer through the water quite a few times to scoop out the frayed bits. Then I reset the cycle, without draining. I do this 3-4 times until there is much less lint. Finally I run it through the whole wash cycle. If I am nearby I will stop the machine and strain again.
When it does into the dryer, I have to clean the lint trap several more times.
I do not use fabric softener.
If I was on septic, I would do the above, but also disconnect the drain hose from the drain line and run it outside through a strainer or an old pair of pantyhose doubled up, onto the ground. I would not use any detergent.
I have to clean out my washing machine by wiping down the drum as there will be more lint sticking to it. My old washer had a filter I could clean out, but this one does not.
I do know some people take them to the laundromat. But the ones here only have front loading machines and I do not think it would work as well for ragging.