I appreciate your stance and understand that it can make sense in certain cases. For this, the optional passphrase can act as an indirect encryption, as it's never stored on the device itself or the microSD card backup. Or you just skip the microSD card backup and roll your own manual backup solution based on the recovery words.

Just an option being available might create doubt in users' minds that they should use it "just to be sure". We've seen that with the optional passphrase, which is horribel UX-wise and was our support issue #1 for a long time (now fixed by forcing users through a mini-education to make sure the concept is clear).

In the end, if you build a product for everyone, you build it for noone. We decided to focus on simplicity, and that involves not encrypting the microSD backup.