If they decide that owning the blockchain = owning illegal crap like CP, drugs sites etc, you may want to protect yourself against the fascist states running such laws.
if such laws were to exist for real then encrypting your drive still wouldn't change anything. it would be like saying after you bought drugs in the streets in front of a police station, come back home and hide it under you bed to protect yourself!
and remember this is not news, it is ancient. if they wanted to put any law there, they would have done it back in 2013.
Node is software through which mining is done. So, while doing mining your personal computer should be encrypted. Otherwise, there will be possibilities to get your pc hacked.
everything that you said here is wrong.
Well, there is something called plausible deniability in which you can have several passwords that decrypt different things. I don't know how that works, but if I was running a node, I would be looking into that. There are also countries in which privacy is actually respected and they couldn't force you to decrypt, so if I was running a node, I would move in such a country. In the case a country is insane enough to legislate against the blockchain claiming it's illegal, I predict they would be insane enough to force you to decrypt too or else you would be indefinitely in jail tho.
I just find this possible Orwellian future interesting, and just in case, those running nodes should be considering this scenario as possible, if governments go full retard against Bitcoin it's definitely within the realm of possibility.