Encryption not working

My server is on Linux 5.4.0-56-generic Ubuntu 20.04.1
Nextcloud 20.0.2
php Version: 7.4.3
CPU 4 cores
8 GB ram

I setup a fresh instance of nextcloud via manual process (LAMP, Nextcloud, SSL) and configured it with the settings seen in my screenshot:

I have folders and files now on it, and i just took a look at the files on the server via the terminal and i am able to see the whole folder structure with names, files and everything unencrypted.
What am i missing? Is there anything else i need to do to make encryption work?

Hello @axo ,

you started a topic in support category.

Unfortunately you ignored the template and a lot of information to help you is missing.

Please add all necessary information like Nextcloud version, webserver type and version, os version.

Without additional information the community members cannot help you.

Thanks man. i edited the OP with my specs,

Ok i tried to cat simple txt documents and the info inside is encrypted. So data is “encrypted”… but structure with folder and file names are completely visible. I can’t call this 100% private, filenames and trees can still have lots of sensitive information.
Any way to prevent these from being seen on the file system if root is logged in?