I have herd a few times now the term ( digitized ) when listening to countys Dakota,Henn, and Rams. They will say something like ( I didnt hear you . You were digitized. ) or ( were you digitized? ) Are they talking about being encripted?
However if the dispatch is also reporting that someone "went digital" it is not likely the scanner that is the problem.When a digital signal suddenly sounds nasal and funny it's due to what it correctly termed "packet loss."
It happens in your receiver and can be caused by several things, one of them being that the received signal is not "complete" in the digital sense and therefore its intelligence literally falls apart.