They deposit the coins into organisations that mix coins from various customers. Its just like a bank. You deposit a fake/stollen 100$ bill one day and, if they accept it, you can withdraw a totally different 100$ bill from an ATM the next day.
Is that something that is actually needed for something or just money "laundering"?
I never actually understood the whole "bitcoin mixer" scheme. Shouldn't all all the transactions still be traceable in the end?