My course notes have:
$$ \text{"A bijective function } f:X\rightarrow X \text{ is called a } permutation \text{ of } X" \tag{0}. $$
So let
$$A=\{1,2,3\} \tag{1.1},$$ $$f:A\rightarrow A \text{ be a } 3\text{-cycle on } A \text{ given by } f(1)=2,\;f(2)=3,\;f(3)=1. \tag{1.2}$$
Then we can write $$ f(\{1,2,3\})=\{1,2,3\}. \tag{2} $$ To be sure, if we wish, we can alternatively write $$ f(\{1,2,3\})=\{2,3,1\}, \tag{3} $$ but we are under no obligation to do so, and we could just as easily write $(3)$ if $f$ were the identity function.
Hence my question: what, if anything, do permutations have to do with order?
If $f : A \to B$ is a function, and $X \subseteq A$, it is common to write $$ f(X) = \{f(x) \mid x \in X\}, $$ as you have done. This is not especially practical though for your purposes, because as you've noticed, sets are fundamentally unordered. So let's do something different: if $(a_1, \ldots, a_n)$ is a sequence of elements of $A$ (so the order is preserved), I propose that we use the notation $$ f((a_1, \ldots, a_n)) = (f(a_1), \ldots, f(a_n)). $$ This means that if we pick an ordering for $A$ to begin with -- in your case, since $A = \{1, 2, 3\}$, we can use the standard ordering -- we can put the elements of $A$ into a sequence in that ordering. That gives us the sequence $(1, 2, 3)$. Then if we apply $f$ we see $$ f((1, 2, 3)) = (2, 3, 1); $$ we have produced a different ordering using $f$. In fact, you can prove that two different permutations always give a different ordering, and you can prove that any ordering can be made using a permutation. Thus we have a one-to-one correspondence between permutations and orderings. And this is what permutations have to do with order.