This is what I’ve always hated with Apple Time Machine, which I think MUST have been deliberate:

    - create an encrypted disk
    - install Mac OS on the encrypted disk
    - use Time Machine to back it up with encrypt turned on

    - Restore from Time Machine
    - enjoy your PLAIN TEXT install :poo:

This isn't really an issue anymore. All M series Macs (and T2?) are always encrypted by default.