The image on the left shows the spy (green arrow) reaching out with his right hand to bug the ambassador (purple arrow). On the right is the same moment in that game from the sniper's perspective. The spy is using the bodies of other people at the party (the woman in the red dress, Toby the waiter, and the ambassador herself) to obscure the bug from the sniper's view.
Cover is an obstruction which blocks the sniper's line of sight to something they wish to observe, typically the spy. A spy can use cover in an attempt to prevent the sniper from seeing what they are doing, especially hard tells. Cover can be provided by map geometry (e.g. walls, columns, etc.), by the bodies of other partygoers, or even by the spy's own body.