So like OHTTP but for UDP traffic? I suppose they are using MASQUE CONNECT-UDP?

They are careful to not exactly claim the same anonymity properties of Tor, though I think a lay reader will read that differently (ie, that they do have the same anonymity property as Tor).

That said being able to verify the inner wireguard conn to mullvad is nice. Of course you have to trust them that they aren't colluding with mullvad to share your identity/ip. But same goes for OHTTP.