Tor is a network that hides your IP address by sending traffic through three relays, each layer encrypted. Websites and peers see a relay's address, not yours.
Bitcoin Core can connect through Tor, and can accept connections as an onion service (doc/tor.md). This stops your internet provider and the peers you connect to from linking your transactions to your home address.
Takeaway: Running a node over Tor protects network privacy; it does not hide what is recorded on the blockchain.