Unable to remove the "Encrypt Local Backup" setting even though I´ve never done a local iPhone backup to my Mac

Hi Lawrence, yes, I had used encrypted backups before with my previous iPhone X. I deleted these backups when I migrated from it to the iPhone 13. I know the password I used for these backups, as I use 1Password and it´s an automatically generated (strong) password. I tried using this one and it didn´t work.

When I moved to the iPhone 13 I decided to delete the old backups because this time I migrated using the wireless process where you get both devices close to each other and then just go through the migration prompts that come up on the new device. When I tried to backup the new iPhone to my Mac I also generated a new (automated) backup password with 1Password and I tried using it to replace the old password I had been using for the previous (now deleted) backups, using the "Change Password" button but this also didn´t work. In summary, I have both the old and new (strong) backup passwords and none of them are working.

As you say, it seems my Mac does "remember" I had used encrypted backups in the past, but maybe it got mixed up because this time I migrated between iPhones using the wireless process, and then I deleted my old iPhone X backups and tried to make a new local backup with my new (recently migrated) iPhone?

Anyway, I can see two scenarios that might save me the hassle of having to reset all settings and then reconfiguring everything manually again on this iPhone:

1. Backup my new iPhone to iCloud using the temporary cloud backup service that Apple is providing in iOS 15 for people that want to migrate to new iPhones (I don´t have a paid iCloud account and need more than the 5GB I have available). After I have made one backup to iCloud I could then wipe the settings and try to enter a new password for local encrypted backups. If this works OK, I´m not sure I would be able to restore my iPhone again from the iCloud backup I had previously done.
2. Migrate my current phone to a different (brand new) iPhone, and then use the new one to try and start doing local backups again. Hopefully this one should ask me for a brand new backup encryption password the first time I try to do this and then everything would be fine.

For now, I don´t have any backups from this iPhone (but I still have copies of the old iPhone X local encrypted backups offline, in the Time Machine backups I´m doing for the Mac).

What do you say? Maybe I´m being too fussy and I should just reset all settings and go through the hassle of reconfiguring everything again on this iPhone? I do have a lot of customization done, and I also use this iPhone in a Corporate environment, so I have to also deal with MDM stuff, etc...

Hi Lawrence, thank you very much for your prompt answer and clarification!

So, if I "Reset All Settings" it means I will lose all of my device configurations/customization and will have to reconfigure everything from scratch?

What settings will this affect specifically? Will it also affect settings for all installed apps? Is there a way of at least saving some important System Preferences customization (Accessibility settings, etc) or backing up just this information and then restoring it later?

This is pretty crazy, because I hadn´t done any backup yet when this happened, and apparently it stores the password in the iPhone and doesn´t let me wipe it even though I´ve done ZERO backups locally.

So, if I now backup my phone to iCloud first, then "Reset All Settings", and plug it into my Mac I suppose the "Encrypt Local Backup" setting in Finder will be unchecked. I could then create a new password for this, but I guess it would be overwritten (in the iPhone) once I try to restore it back from the iCloud backup I did previously?

I´m just trying to see how I could save myself the hassle of having to reconfigure everything back again on the device once I "Reset All Settings" just for the sake of resetting a backup password I´ve never used for any backup... :-P

Hi Lawrence, it turns out there´s a 3rd solution to solve this. If I use the wireless migration process to transfer the info from my current iPhone to a different (wiped clean) iPhone, I can then set a new local encryption key in Finder for this new phone and I´m then able to use it to start doing local encrypted backups again.

After I did this I just did a full reset to my current phone and then copied everything back again from the new iPhone using the wireless migration process. I could also have copied everything back to my current iPhone using the local backup I had just done, as I tested it and it´s working fine.

In summary, I was able to start doing local encrypted backups again with my current iPhone without having to reset all settings in order to clear the (never used) local backups encryption key, as this would make me go through the hassle of reconfiguring/customizing all settings manually.

Additionally, I´m not sure if this would also have worked if I had used iCloud backups, but I didn´t like the idea of having to wipe my iPhone (without any local data backup) to then try and restore my data from a remote iCloud backup I wasn´t sure would be OK.