For anyone looking for a comparison to TOR, as far as I understand it:

It’s comparable to the TOR hidden services that can be reached by onion addresses. Here we have the nostr npub to address a service. 

Since both entry and exit node only connect to relays, they are the only part that needs to be publicly reachable. Services can run behind firewalls on machines that are not reachable from the outside. 

But it’s not like TOR in term of being an anonymous browsing tool for any website. It’s (currently) only for exposing a single service in a censorship resistant way.