Unless I am mistaken about how it works, it seems like it is the most secure storage method on the server in regards to a successful hack?
Server wide encryption has the issue if someone gains root access to the machine, they instantly have access to all files (by getting the keyphrase from the config) - but Per User means even if they accessed the SSH root, they still couldn’t actually access any files? (unless the user was logged in at the time)
Are there any draw backs I am missing / features that don’t work with per user keys? Can files still be publicly shared?
The server-side encrypted was designed for external storage. You just upload encrypted data to a storage hoster and the keys stay on your server. The storage provider can’t do anything with the data. On a local setup, an admin (root on the system) can find ways around the server-side encryption. You could say that a little, not perfect protection is better than none, but you have to consider that the server-side encryption adds a lot of complexity to the code (can have bugs, backup and restore are more complicated, …).
As a user, I use client-side encryption through third-party products. Nextcloud has implemented its own client-side encryption recently, but there are still too many bugs and the response time to solve these bugs combined with the rather long release cycle of the desktop client let me hold back to use this on important data.