Earlier quoted context omitted.
How are they encrypted, if a disk scraper can find them and display the contents?
They are encrypted on disk, but like an encrypted hard drive, decrypted when the user logs in. I'm unsure if they are accessible when the phone is locked, I don't think so. And apps can't access it. The drive scanner found them because they were in unallocated space.
The issue is that the OS now provides a convenient “backdoor” for root-privileged malware to capture sensitive data from any app effortlessly; it just needs to subscribe to file system events (using inotify) to grab the files as soon as they’re written. Without it, the malware developer would have to write hooks for each app they wanted to eavesdrop on individually, which raises the bar at least a little bit.