I wanted to upgrade from Big Sur to Monterey and after the download completed, I get this message, that I cannot upgrade because my disk was encrypted.
I got it working in the end! Coming from another bug I got the following solution steps, in order to get it working.
As you can see here in FileVault, there was a warning displayed, that were some users not being able to unlock the disk. The button "Enable users..." in addition to the button "Turn Off FileVault" were not clickable, so I troubeshooted that problem with this and came to this Reddit thread. The second answer from the first post was also needed to troubleshoot and fix the bug.
Short summary / tl;dr
Identify if your current or any user has Secure Token enabled with
sudo sysadminctl -secureTokenStatus <usr>
Check every user on your system
2.1 Search for users
dscl . list /Users | grep -v '^_'
2.2 Check the user with
sudo sysadminctl -secureTokenStatus <user>
If for every user the return is
Secure token is DISABLED for user <user>
sudo rm /var/db/.AppleSetupDone
for reenabling the Apple Setup Page
and reboot normally
3.1 Setup a new user in the setup menu
This user will have the Secure Token ENABLED
3.2 Go to Users & Groups and reset the other account's password
The old user will now have his Secure Token ENABLED (again / reenabled)
3.3 Log out with the current (temporary) user
3.4 Log in with the old user