Boredom, stress, or anxiety can cause a dog to hold down toilet paper and eat the toilet paper or just shred it to bits.
The dog can also eat toilet paper as an instinct they have where they would hold down their prey such as meat and chew on it and eat it.
If your dog is chewing on toilet paper or Kleenex remove it from them and put it away from them.
When my kids were in diapers our dog would go to the trash can where the diapers were and then take them out and shred them to bits on the carpet and everywhere else.
I asked the vet why he was doing it and they said it was probably because the dog liked the scent of the poop and pee in the diapers and wanted to chew on them and shred them up.
After that I took the diapers out daily and put them in the outdoor trashcan to keep the dog out of the dirty and wet diapers.
That was a huge mess to clean up and at least your dog is only eating and shredding toilet paper and Kleenex.
If you have kids in diapers then I would recommend taking the dirty diapers right outside as soon as possible to keep your dog from getting them.