After update to 28.0.4 Error Encryption not ready: Default encryption module not loaded

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Nextcloud version (eg, 20.0.5): Nextcloud desktop client 3.12.3
Nextcloud version (eg, 20.0.5): Nextcloud Hub 7 (28.0.4)
Operating system and version (eg, Ubuntu 20.04): macOS 14.4.1
Apache or nginx version (eg, Apache 2.4.25): Where do I find this?
PHP version (eg, 7.4): Version: 8.2.17

The issue you are facing:

Is this the first time you’ve seen this error? (Y/N): N

Steps to replicate it:

  1. Start nextcloud desktop client
  2. Wait for the client to check for changes on the server
  3. files start to sync and then I get “Encryption not ready: Default encryption module not loaded”
  4. I check setting on the server and it say the Default encryption module is enabled under the admin security settings.
  5. A fer serivces with use the webdev link now get 503 Errors as well.

The output of your Nextcloud log in Admin > Logging:

Log page is blank everytime I look for logs on it.

The output of your config.php file in /path/to/nextcloud (make sure you remove any identifiable information!):

<?php
$CONFIG = array (
  'apps_paths' =>
  array (
    0 =>
    array (
      'path' => '/usr/local/www/nextcloud/apps',
      'url' => '/apps',
      'writable' => true,
    ),
    1 =>
    array (
      'path' => '/usr/local/www/nextcloud/apps-pkg',
      'url' => '/apps-pkg',
      'writable' => false,
    ),
  ),
  'logfile' => '/var/log/nextcloud/nextcloud.log',
  'memcache.local' => '\\OC\\Memcache\\APCu',
  'one-click-instance' => true,
  'one-click-instance.user-limit' => 100,
  'memcache.distributed' => '\\OC\\Memcache\\Redis',
  'memcache.locking' => '\\OC\\Memcache\\Redis',
  'redis' =>
  array (
    'host' => 'localhost',
  ),
  'passwordsalt' => 'removed',
  'secret' => 'removed',
  'trusted_domains' =>
  array (
    0 => 'localhost',
    1 => 'removed',
    2 => 'removed',
    3 => 'removed,
  ),
  'datadirectory' => '/usr/local/www/nextcloud/data',
  'dbtype' => 'mysql',
  'version' => '28.0.4.1',
  'overwrite.cli.url' => 'http://localhost',
  'dbname' => 'nextcloud',
  'dbhost' => 'localhost',
  'dbport' => '',
  'dbtableprefix' => 'oc_',
  'mysql.utf8mb4' => true,
  'dbuser' => 'removed',
  'dbpassword' => 'removed',
  'installed' => true,
  'instanceid' => 'oceuo1dj8ha1',
  'maintenance' => false,
  'theme' => '',
  'loglevel' => 2,
  'twofactor_enforced' => 'true',
  'twofactor_enforced_groups' =>
  array (
    0 => 'admin',
  ),
  'twofactor_enforced_excluded_groups' =>
  array (
    0 => 'admin',
  ),
  'mail_from_address' => 'alert',
  'mail_smtpmode' => 'smtp',
  'mail_sendmailmode' => 'smtp',
  'mail_domain' => 'removed',
  'mail_smtpsecure' => 'ssl',
  'mail_smtpauth' => 1,
  'mail_smtphost' => 'removed',
  'mail_smtpport' => 'removed',
  'mail_smtpname' => 'removed',
  'mail_smtppassword' => 'removed',
);