How to convert encrypted mpeg dash created with Bento4 mp4-dash.py to MP4
After you have made concat with your method 2:
You need the decryption key value (not the KID) for each track (I will not explain how to find the key value;) and then from your video and audio files use mp4decrypt from bento4 (just google it if you don't have it yet):
mp4decrypt --key KID:00112233445566778899AABBCCDDEEFF audio.m4a audio_decrypted.mp4
mp4decrypt --key 1:00112233445566778899AABBCCDDEEFF video.mp4 video_decrypted.mp4
you will have to replace KID with your 16 bytes hex key ID and 00112233445566778899AABBCCDDEEFF with your real key value
then ffmpeg will work (as expected) with your decrypted tracks :
fmpeg -i video_decrypted.mp4 -i audio_decrypted.m4a -c copy output.mp4