Sure, it's more obfuscation than money laundering, but it can still make it hard to trace given sufficient participants. One big part is also splitting up a big

Sure, it's more obfuscation than money laundering, but it can still make it hard to trace given sufficient participants. One big part is also splitting up a big single wallet into lots of smaller ones, so now you need to differentiate your privacy freak from your marketplace consumer from your small time marketplace seller from people you actually want to catch. You can also repeat the process. Eventually the traces become hard to follow, especially when the person only uses relatively small fragments from the output.