Daedalus seems to create a new set of incoming addresses, is this epoch based, or a privacy measure?
While it's intended to be a privacy-enhancing measure, it's currently somewhat negated by the fact that any Cardano wallet that's currently registered for staking has every address easily linked to the staking address (e.g. see Addresses tab of https://adastat.net/accounts/7e8e16462417aaf4d82249228050eb66b16a143c0433b08de794675f). So you might want to create a separate wallet that's not involved in staking for any intermediate transactions where the new address re-use will actually have the desired effect (not sure if legacy Byron wallets are still create-able anywhere, they would also do the job!).
It's a privacy measure. Daedalus suggests you should only use an address once (although they can be re-used!). There are different addresses such as for Byron and Shelley, however these are rare changes.
All transactions are public, so one can see all transactions sent to an address. If you only use one address, then anyone that knows that address can lookup all the transactions to that address.