While I understand the concept of rotating addresses, I don't understand how it's useful here. Let's say that this was properly implemented in p2pool. Who does it benefit? As a miner, I still have to connect to a node using a BTC address. I can't change that address constantly, or I'd always be ramping up shares on the chain for payout, which is exactly the opposite of what I want in a PPLNS pool.
What am I missing?
The benefit is specifically for the node owner using the bitcoind wallet on the node for mining income.
By using this, rather then setting an address with the miner you can simply use a name like AntS3 or SP20, the hash power will go to the node default address, which will now be cycled automatically increasing privacy and security.
To be honest the security benefits are a trade off, I would still feel better about not keeping any private keys on the node itself, but if privacy is a big concern for you this is probably a good trade off.