How to deal with procrastination and delays in final assignment of undergraduate class?
If the students were reasonably expecting the option of a recovery exam, it seems unfair to deny it for the current run.

In future, you could offer the recovery exam only to those who tried to pass in the regular way, i.e. handed in an essay on topic (but maybe bad and hastily written - so more unpleasant grading for you).

Generally, I would suggest talking to some students to figure out why they didn't hand in an essay. Maybe it was plain procrastenation, maybe it was wise prioritizing because they had other, more important deadlines in the way, maybe they found the course not that interesting and decided not to complete it. In my experience, undergrads often have more self-awareness of their learning process than we would expect :)