But wallets aren't associated with a real person by default, unless it's created through some service that does KYC. If you can get anonymous tokens in an anonymous wallet, who cares if the transactions are public?

Depends on the blockchain. There are plenty of ways to have private transactions.

Bitcoin came about to solve the trustless component and provides weak anonymity.

Then Monero, ZCash, etc built on that to add privacy and anonymity.

If you use bitcoin nowadays and expect anonymity or privacy you are clearly mistaken but there are plenty of platforms built for privacy and anonymity on extensions of that same underlying technology.

Like basically every vendor that accepts cryptocurrency and values privacy/anonymity is going to offer monero as an option.