Selfhosted
A place to share alternatives to popular online services that can be self-hosted without giving up privacy or locking you into a service you don't control.
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If you own the hardware it isn't a issue
Yes, it is. If people are relying on files to be encrypted they may dispose of their disks differently. Or the NAS might be stolen.
Or an threat actor might just turn it off
Saying files are encrypted when it is not true is an issue, regardless of who owns the host box. Even for a small instance that is private family or friends.
Someone could simply modify Nextcloud to lie about encryption. If you don't control the server there is no way to know.
It all depends on your threat model, I own my Hardware as well but I'm still not going to use a software that is shown to me that they don't take security seriously but I'm also more paranoid than most