It's a coin mixer: you deposit ETH into a common pool shared with a bunch of other people, and you get back (off-chain) a code that can be used to redeem your deposit at a later date. Since there is no link between the code and the sender on-chain, nobody knows which contributor to the pool withdrew.

So if there are N deposits then later N withdrawals, the only thing you know is that each withdrawal matches one of the deposits, but not which one.

As for privacy improvements:

- If you deposit then immediately withdraw, observers might suspect that you instantly withdrew your deposit.

- You need ETH for the withdrawal transaction, which has to come from somewhere (making it potentially traceable). With their relayers you can withdraw to an empty account while hiding the origin of the transaction fee.