I heard of drop box and google drive running hash checks on files that were shared.
Few people reported that Amazon Drive disabled file sharing option when they directly shared copyrighted content and some got account bans. ( most of it was reported on reddit https://www.reddit.com/r/DataHoarder/ )
Better be on the safe side and have your stuff encrypted, I would go nuts if I lost my 40TB library because providers one day decided to ban all accounts and save some space.
Those keeping illegal content are usually the ones having most data and if they decide its to much cost the easiest way is to ban those account, especially since they already collected 1 year subscription.
But then again for every 1 user with tons of data there are probably 100 keeping just couple of gigs.
For me the main reason is I dont wanna be exposed to possible lawsuits down the road when studio's decide they could do some scare tactics. Iam basically not loosing any functionality having all my data encrypted the OS and the apps see all my data unencrypted anyway.
I would agree encryption would be pain if you needed to encrypt your data, upload it and when you need it download and manually unencrypt but since everything is done on the fly there is no reason not using it
Iam using rclone to connect/mount to my Amazon Drive where all files are encrypted and giving Plex Media Server unencrypted access to files.
I made a test few hours ago for another topic but this is how it works.
Started play on a movie and it took around 4, 5seconds to start playing then I moved to end of movie eg seek and it took additional 8,9 seconds to start playing. The video in test is 22GB and encrypted on amazon drive.
So shaving of maybe 1 or 2 seconds without having files encrypted is just not worth the risk.