Nope, I am sure that’s a bug and not a feature. To reproduce
Step 1. Tap on the encrypted text
Step 2. Password prompt appears (the bug - focus is not on the text entry)
Step 3. Start typing your password
Step 4. You realise password not registered, tap on the password entry box
Step 5. Too late, encryption text disappears
I experienced this twice, plus the new iOS app slow performance is a real bummer.
Been with Evernote since Jan 2009.