If you copy or move encrypted files from a DFS drive to a folder that does not have an encryption rule applied, the files will be decrypted, even if Persistent encryption is enabled.
Known to apply to the following Sophos product(s) and version(s)
SafeGuard LAN Crypt Client 3.71 and higher version
Note: This issue has been seen with SafeGuard LAN Crypt Client 188.8.131.52 on Windows 7, but it may occur with other versions of SafeGuard LAN Crypt Client and MS operating systems.
What To Do
This issue was fixed with Hotfix 184.108.40.206 - Driver Hotfix 220.127.116.11.
Please contact technical support to obtain the hotfix.