Android documentation explains this. Full Disk encryption is deprecated and should no used anymore. The new method - file based encryption - means that data is encrypted per application. So the system itself (kernel, system files, recovery partition) will not be encrypted. Assuming I understood the documentation right.
Side note: TWRP will not be used much longer according to LOS.
A/B devices have the recovery image built in into the boot image […]. This means that there’s no recovery partition and recovery will have to be included at build time into the OS.
That being said, it would of course be a great argument for /e/ if it would be “secure by default” which (for me) includes encrypted storage.