> how is it better than a VPN

There isn’t one centralized entity with your email address and credit card information on file that can pass it on wittingly or otherwise to interested parties.

> how is it untraceable

It’s not. It tries to be by routing your connection through a random set of relays + exit node (each peeling back one layer of encryption, like an onion), but it hinges on the assumption that those nodes aren’t all operated by the same entity. If the network is dominated by a bad actor (at one point the FBI had a large fraction), your route can land entirely on their nodes, and they can associate the original request with the decrypted request at the exit node. Of course you’re still protected by regular internet security, plus the browsers often take additional measures to make tracing harder, but it’s definitely not a guarantee.

> what makes you think you dont get tagged by 3 letter agencies […]

You absolutely do, lots of mainstream media coverage about this.