The word 'transparent' here doesn't mean invisible — it means the proxy doesn't hide anything about you from the destination server.
How it works
A transparent proxy intercepts traffic, often without the client even being configured to use one, and forwards your real IP address along with the request. Schools, offices, and ISPs commonly deploy these for content filtering or caching rather than privacy.
Why they're used
Because they don't require any client-side setup, transparent proxies are easy to deploy network-wide for tasks like blocking certain sites, caching frequently requested content to save bandwidth, or logging traffic for compliance reasons.
Why they're a poor privacy choice
If your goal is anonymity or bypassing a block, a transparent proxy defeats the purpose since the destination site sees your real IP anyway. For anything privacy-related, you want an anonymous or elite proxy instead.