[jdillaaa]

That's pretty accurate. Some stuff is encrypted with the device passcode like Health data and Keychain data. Around iOS 9 [1], Apple implemented some functionality to encrypt backups through a similar mechanism. This never panned out.

1) https://wccftech.com/ios-93-prompt-passcode-restoring-encryp...

Edit: as others have pointed out, looks like this never happened because the FBI said no.

[SanchoPanda]

An alternate explanation is that this never occurred because if people lose their passwords they would be completely out of luck.