Time Machine encryption variations - how does each work?
It’s pretty easy if you just look at the disks and you’re on a moderately new macOS version.
Today, Apple encrypts disks and not backups. If the source is encrypted, it doesn’t matter because it gets copied unencrypted to the Destiination. If the destination is not encrypted the file stay clear, if the destination is encrypted, the files are encrypted.
Apple does encryption at rest, so until the filesystem is uncounted and then the key to decrypt them is no longer valid until a key to unlock is provided.
You can inspect encryption status with these two commands.
diskutil apfs list
diskutil cs list

APFS is the newer modern filesystem and core storage was used after the original method of encrypted sparse disk images. Complicated, so that’s why you see so many answers here on the old method, the newer method and the current method. Full disk encryption arrived with 10.7 Lion, so many major versions ago the old implementation is likely not in play for you.

What is the difference between FileVault 2 and Disk Utility Encryption?
When does encryption actually happen in MacOS/OS X encrypted volumes?