There is certainly some protection, but the issue is that it's not perfect. Tor is just one layer of privacy. Many users still log into Facebook, X, Instagram, and other censored platforms, which can expose their identity regardless of using Tor. Proton.me email addresses with fully anonymous aliases offer better protection, especially when combined with Tor. But how many people truly care enough to take those extra steps?
But the fact is that there are degrees of privacy. Accepting digital IDs or CBDCs because we have much less privacy today than we did 100 years ago is like accepting that the government can put cameras in every corner of your home because you carry a cell phone anyway and are geolocated, and there are more and more cameras on the streets.