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OCI - Enquiry on traceroute behavior in IPSec Site-to-Site connection

Currently I have a VM machine instance in a subnet/VCN that should route 10.0.0.0/16 IP addresses towards a CPE through a DRG and IPSec Site-to-Site connection. At the moment we have an issue that I believe lies in the routing on the on-premise end point. For troubleshooting traceroutes on the VM instance showed only a first jump to a public IP address corresponding to my Oracle tenant region. It's to my understanding that the communication should show IPs corresponding to RFC 1918 so I'm wondering why is it displaying these results?

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