It sounds like (although I'm not an expert) that it would still be impossible for them to encrypt files in higher data protection classes, since the iCloud backup keys are stored within iCloud Keychain, which is end-to-end encrypted.
Edit: and honestly if I'm misinterpreting that and it's an issue for a specific person, they should just use iTunes encrypted backups and not rely on iCloud.
It sounds like (although I'm not an expert) that it would still be impossible for them to encrypt files in higher data protection classes, since the iCloud backup keys are stored within iCloud Keychain, which is end-to-end encrypted.
Edit: and honestly if I'm misinterpreting that and it's an issue for a specific person, they should just use iTunes encrypted backups and not rely on iCloud.