This policy setting prevents File Explorer from encrypting files that are moved to an encrypted folder.
If you enable this policy setting, File Explorer will not automatically encrypt files that are moved to an encrypted folder.
If you disable or do not configure this policy setting, File Explorer automatically encrypts files that are moved to an encrypted folder.
This setting applies only to files moved within a volume. When files are moved to other volumes, or if you create a new file in an encrypted folder, File Explorer encrypts those files automatically.