according to the reply here, TWRP 3.2.1 does not yet support device encryption on Android 8.1:
https://github.com/TeamWin/Team-Win-Recovery-Project/issues/1129
I ran into the same issue yesterday when updating to the March security patch, so I went with the manual patching of the boot.img for installing Magisk. I don't need TWRP for anything else, so that is ok for me and I can wait for a TWRP with encryption support.
When I first set up the device on february patch, I rooted it before the first boot (together with the unlock - step), so TWRP worked back then because the device was not yet encrypted at that point.