Hi Mayank, 
Hope I am not too late to respond and you got the answer already. But just for others to get idea I will post my response. 
The queue encryption encrypts data at Database level. From Blue Prism queue you can still see the data as-is. To mask data with encryption, you will have to use internal encryption at object/process level before passing to queue and apply decryption again while reading queue. 
The encryption checkbox on queue ONLY encrypts "data" column at database level. 
Hope this explains. 

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Harshil Mehta
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