While I haven't seen the process itself I've poked around the darknet and I've seen Bitcoin 'washing' services advertised it seems a bit like a manual version of Dark Wallet where it's just mixing up transactions amongst each other to confuse anybody who might be watching as to which source it came from.

Also, the fact that you're trying to poke around peoples' addresses because you're a nosy twat just goes to show people aren't paranoid