Proxies hide your IP from the person or site you're connecting to. Your ISP (and theirs) can still see everything, and ISPs will hand over logs to law enforcement when told to.
The only real solution is encryption to stop sniffing, so even though connections can be seen, the data that passes through them cannot be. This restricts what you can do, as not all peers/seeds/whatevers support or enable encryption, so if you connect to them it won't be hidden, and if you force encrypted-only connections you won't be able to connect to them, so your pool of seeds/peers shrinks.