I get that it's paper so probably not that big of a deal environmentally, but why would anyone want to individually wrap TP rolls??
Also common in commercial environments where you want to leave rolls out in the open, like a couple extra in every stall.
Wrapping with some tissue paper is probably more environmentally friendly than people buying 4-packs with non recyclable plastic.
Incidentally I've also worked somewhere with a little flag indicator on the milk cooler to let the kitchen staff know it's out and needs refilling (and to warn other users).
Why would they package those in larger packs? My guess is that the paper does help protect the roll while it's waiting to be racked. Dust/splashes/unravellng/etc. Might be where hotels get their TP.