Tor can be used for any internet browsing you usually do. The key difference with Tor is that the network hides your IP address and other system information for full anonymity.
The company behind a VPN can still access your information, sell it or pass it along to law enforcement. With Tor, there’s no link between you and your traffic, according to Jed Crandall, an associate professor at Arizona State University.
I don't know if it's even possible, but it would be cool if I could use the fediverse over TOR just for the sake of supporting TOR. Not sure if there would have to be specific .onion instances, if normal instances could just be mirrored with a .onion address, or if a .onion instance would even be able to federated in the first place. I just don't know how it works.
Other use cases may include keeping the identities of sensitive populations like undocumented immigrants anonymous, trying to unionize a workplace without the company shutting it down, victims of domestic violence looking for resources without their abuser finding out or, as Crandall said, wanting to make embarrassing Google searches without related targeted ads following you around forever.
I'm certain an all-out legislative war would be waged against TOR if it were to become popularized for most of those reasons, under the more convenient guise of "criminals and children!"