"Standard folders" are only Encrypted once during transfer, and a RW/RO key is enough to decrypt the data fully. However, "Encrypted folders" are encrypted twice during transfer, increasing CPU & memory usage (I would like to see some benchmarks). The RW/RO key it that case are capable of decrypting both encryption layers, but the "Encrypted key" are only capable of decrypting the first layer. Although they can not read the data, they are fully capable of encrypting it once and sending the data back to the nodes with the RW/RO keys, which can then decrypt both layers.
Read more at: http://blog.bittorrent.com/2016/01/21/understanding-the-sync-encrypted-folder/
