How to Have Device Encryption With Magisk Systemless Root Installed?
This was an old problem with Lineage OS based ROMS, where the encryption just didn't work properly. The problem is that ones the encryption is set, it cannot be changed in the GUI. However, I had a success in the past where I changed my encryption key through vdc cryptfs changepw command that can be run on the Terminal app from the developer menu (or any terminal emulator) with a required root access, and you can only change an old password to a new password, an old pattern to a new pattern, ...etc, but not a pattern to a password, ...etc.

I believe the issue has been resolved in the latest Lineage OS (correct me if I am wrong), as I am using another Lineage OS dialect called Havoc OS that have this issue perfectly resolved!