NVS encryption
ESP-IDF scrambling the stored-settings partition with a key the chip protects.
NVS encryption encrypts the NVS partition with AES-XTS, keyed from a flash-encryption-protected partition or an eFuse HMAC key; it hides values from a flash dump but not from running firmware, and has no integrity tag.
Examples
With NVS encryption on, a flash dump of a bench node shows its stored credential only as scrambled bytes.
The NVS keys come from an eFuse HMAC key or a protected
nvs_keyspartition, not from anything the attacker can read off the flash.