Normally I have 'Prefer encrypted peers' & 'Ignore unencrypted peers' always switch on. But today I turned it off for one particular download.
When I reinstated the encryption option active torrents:
1. Seeding torrents started (when started with the encryption switch off) continued seeding to open peers.
2. Downloading torrents (when started with the encryption switch off) continued to download from open peers.
Only when I paused and restarted the torrents did the 'encryption required' option kick in.
I suppose if used correctly you could have torrents that download & seed to all peers and others only connecting to encrypted peers.
But it would be a good option to have a flag in cmd-I to ignore or use the global encryption setting.