A Client will connect the elders cosset to the public address the client is using (clients have unlimited identities (public keys)). Those Elders will see the IP of the client, but will not use that info when passing the network request on to its destination. So the address of the client on the network is this public key (identity) and not the IP. As the network is recursive and not iterative we can do this easily. This is what we mean when we say the IP is scrubbed at hop1.
Hope that helps