Then it isn't encrypted or the unit you are hearing is transmitting in the clear and the other unit is encrypted. Encryption on a digital system like KSICS actually changes the encoding algorithm completely. There is no way for your radio to actually change the encrypted digital signal into anything meaningful. What you might be hearing is what the users call, "going digital." Your scanner isn't decoding the digital signal initially due to either multi-path, low signal level, or some such.
Frequently you can also hear a conversation where one of the parties is using encryption and the other side is transmitting in the clear. All of the radios (with encryption built in) will automatically decrypt a transmission that is encrypted, if it has the proper key to do so, even if it is set to transmit in the clear. Only those talkgroups that have encryption set at the talkgroup level are fully encrypted all the time regardless of the setting on the radio. I think most of, if not all, of the regional PSAP groups were set that way initially.
Shortly after the KBI moved over to KSICS I heard several agents talking on their state-wide channel one afternoon. All of them were encrypted except one person. She kept talking about going "up to the CI's (confidential informant) house first" before going for the buy. Apparently one of the other agents couldn't find it, so she gives out directions to the street and cross street and the color of the house.... Hopefully, the drug dealers didn't have digital scanners yet!