So looking at this service, and possibly other mixers, aren't they effectively just exchanging my transaction history with another stranger.

For example.

Alice deposits 10 mBTC into chipmixer and gets a 8 mBTC chip and a 2 mBTC chip.  The chips Alice gets were from earlier in the week, so they don't have her TXN history.

Bob comes around later and deposits 10 mBTC and picks up a 8 mBTC chip and 2 mBTC chip.  Bob does something bad with this chips and gets investigated.  When they trace the coins Bob used, they ultimately trace them back to Alice, since Bob happened to pick up Alice's earlier deposit.  So although this is great for Bob, Alice gets a knock on the door with questions about what she's been up to.