Is this HW or SW encryption? Because if HW, it might simply be that it detects HW needed and it reports to be ready. I don't use encryption so I really don't know it - this was pure guess top of my head.
The data encryption option will allow you to encrypt the data at rest. I am pretty sure you have an encryption license. You can create the filesystem and then disable encryption using the following command "filesys encryption disable" if you don't intend to use it.
SunshineM
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Posted April 12th, 2016 04:00
It is working now, got expected output;
"Data Encryption Supported: No"
In PXE installation, modified "initrd" file and added parameter "encryption=disable" > Performed PXE installation > Got expected result.