Encryption just makes it difficult for your ISP to automatically throttle your torrents. Anyone can still download the torrent themselves and see that you're an uploader.
They would have to get all their pieces from you, breaking protocol. They'd also have to be doing this on a large scale. They'd also either be breaking whatever laws you might be breaking, or they are providing you an implicit license.
I'm saying that whoever was proving a violation would have to show infringing distribution of a protected work. Bit torrent pieces generally contain a small fraction of the total work, which could easily be fair use. You'd have to show that the person was actually transmitting a protected work against its license. That piece may have been a short clip in a more encompassing work. You won't know until you get more of the context (other pieces).
So, maybe "they" (person/group alleging infringement) wouldn't have to get all the pieces, but it makes their case much stronger. There can certainly be fair use arguments made for transmitting torrent piece sized copies of protected works.
Nope, still wrong (not 'arguably wrong', plain factually wrong). That's not how 'fair use' works - it's not because you send a part (what you call a 'clip') of a work, that it becomes fair use all of a sudden.
I'm not sure what you're reading, but I never said that sending part of a work makes it fair use. I said that there are fair uses that involve sending parts of a work and that proving a single or small number of pieces were transmitted between parties is not ipso facto evidence of infringement.
> They would have to get all their pieces from you
Unless you are sharing some packed and/or encrypted media, it's probably streamable and even sharing a part of it is enough to break the copyright laws.