Hypotonic solutions are the solutions with lesser solute concentration and with higher water potential.
Water always moves from higher water potential region to lower water potential region.
In this case,
higher water potential region - hypotonic solution
lowe water potential region - onion peel and RBCs
So, the water from the hypotonic solution moves into onion peel and RBCs(separately).
This process is called endosmosis.
Since, onion peel cells possess cell wall, they resist the hydrostatic pressure created by the water entering into the cell. So, they just turn turgid and maintain a rigid shape but do not burst.
While, the RBCs have no cell wall and can't resist the pressure created by the water entering in. So, they bulge and bulge and finally burst.