If rates are rising above 4.25%, swaption collar and receive fixed swap are going to cost you dearly as long as rates are rising. Only for receive swaption we have a floor on the losses - the option premium paid. When rates rise above 4.25% at expiration, we let the option expire OTM.
Yes, clear if rates increase receive fixed is a bad choice, swaption collar again.
And yes, agree receiver swaption will expire OTM. We will receive (high) market rates instead. But in that case why the heck did we buy it at all? We paid a premium for nothing.
For hoping that rates are going down past X, so we will exercise the option in the money, without having to worry about the possibility of a rate increase.