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They do routing. Even if you're connecting to a non Cloudflare server, the traffic may still be routed through their servers.

Why would they want to peek traffic? Most likely for statistics (most frequently visited websites etc).

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Can you give an example of a BGP route or traceroute to a site not on Clownflare that was routed through Clownflare?

It depends on the origin and the destination. Their Magic Transit service explicitly allow this, and I assume they have agreements with other AS in case something goes wrong on either side (it often does). You'd have to directly ask them to know specifically but I don't think they would answer since that's proprietary information.

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