Some New Urbanist neighborhoods have homes where the back windows face windows in other homes. Sometimes there's only a garage and no yard out back. The developers just want to pack as many houses onto postage stamp yards as possible. But a typical cohousing neighorhood, built for lifestyle over profit, often has a very private back yard with beautiful scenery and little ability to see neighbors.
When you sit on a cohousing front porch reading a book, it's fair game for a neighbor to start a conversation. That's part of the reason you are there. But if you're on your back deck, it's a cultural taboo for anyone to yell up and say "hello."
Perhaps one reason that cohousers recognize the importance of privacy is that so many of them are introverts. If you're not living in cohousing, you might be surprised to learn that Myers Briggs tests repeatedly find the majority of cohousers are introverts. There are indeed many extroverts, but there are generally more introverts.
As an introvert myself, who also likes people, I find cohousing the perfect balance. I have plenty of privacy when I need it. And when I'm in a mood for community, it's so easy and simple. There are regularly-scheduled meals and events every week. This means I can show up if I feel social. But the events will happen with or without me. Unlike a party invitation where I feel bad if I don't show up, there is no expectation for me to be at these regular events.
In cohousing, you can have a social life on your own terms and at your own time when you are feeling social. Furthermore, spontaneous events happen all the time. You can be swept up in the moment of something fun and unexpected that you didn't have to plan yourself.
I think many extroverts don't see a need for cohousing. They can live happily in an isolated house because they have the natural energy to go out and make social things happen. Extroverts have an inclination to create community wherever they go.
However, it is my belief that both extroverts and introverts live more happily in cohousing than in isolation. And not only community but privacy is fundamental to the equation.