"$BW_N$ is a permutation over the squares $\mod N$". Does someone know what that means?
You define your map $BW_N:\mathbb{QR}_N\rightarrow \mathbb{QR}_N$. Note that $$\mathbb{QR}_N:=\{r\in Z_N: r\equiv y^2 \pmod{N}, y\in Z_N\}$$ and a permutation is a one-to-one mapping (bijection) from a set into the same set.
Basically, this map is a permutation if under $BW_N$ for every $x\in \mathbb{QR}_N$ there is a unique $y\in \mathbb{QR}_N$ (and clearly the same for its inverse $BW_N^{-1}$).
Now, since you have $N=pq$ being the product of two Blum integers $p$ and $q$, you have that for every of the four possible square roots of $r\in\mathbb{QR}_N$, which are of the form $(\pm\alpha,\pm\beta)$, exactly one of those is also a quardratic residue modulo $N$, i.e., an element of $\mathbb{QR}_N$ (this is not hard to prove).
Consequently, $BW_N$ gives a bijection from $\mathbb{QR}_N$ to $\mathbb{QR}_N$ and this is what is meant by "$BW_N$ is a permutation over the squares mod $N$".
Does that mean its a trapdoor permutation? Or what might it mean?
The factorization of $N$, i.e., the knowledge of $p$ and $q$, is the trapdoor of this permutation and is required to efficiently compute the inverse.