I'm wondering the same. I'm testing Opera for Android 47 beta and have setup syncing. For encryption I have selected "Use a sync passphrase". The line under this option clearly states: "Encrypts all synced data".
However, when I login on sync.opera.com with ONLY my Opera Account credentials - I have NOT entered my sync passphrase - I see data like Speed dials, Open tabs, History etc. When you state "Encrypts all synced data" this should not be possible without entering the passphrase first.
Today, I have tested it again. To start fresh, I have removed all data by selecting "Reset sync data" on sync.opera.com.
When I first setup sync (including passphrase encryption) on Opera 54 for Windows and then login on Opera for Android 47.0.2249.129124, the data shows encrypted on sync.opera.com.
Then I removed all sync data again. When I then setup syncing on OfA ONLY (including "Use a sync passphrase"), all data on sync.opera.com is visible, hence not encrypted.