My experience is that it depends on the type of encryption used. For the "official" high end formats available to all radios systems, such as AES, the scanner "skips". You may briefly see "ENC" on the display.
For the "budget" type, such as ADP, which started out as a Motorola propietary deal, you may hear an awful and broken racket. Sometimes you see ENC and sometimes the scanner holds on the channel, perhaps just briefly.
Any type of digital encryption will be muted no matter what flavor is used ADP to AES and beyond it doesn't matter what algo is used. What matters is if it phase 2 or TDMA digital comms. Scanners don't know how to interpret the silence word in the voice frames of a TDMA communication. P25 phase 1 should mute encryption everytime.