it is privacy. The ISP and routers can see the IP addresses but that gives a lot less info than the url since most websites will pull from a changing set of IPs due to server changes, cdns, and 3rd party content (e.g. ads). For a large number of sites, the IP addresses will just tell you that someone is looking at a website hosted by cloudflare/aws.

(also just getting rid of the name is effective at getting the info away from low tech surveillance like schools where someone on the route is mildly interested in seeing/blocking connections but won't bother if it's annoying to do)