If a file in a folder protected by File Share Encryption is copied or moved to an unprotected folder, the file remains encrypted.
Users without the decryption key will not be able to open the file, even though it is in an unprotected folder.
This is by design.
The following will occur when a file is copied or moved from a folder protected by File Share encryption to a folder that is not protected by File Share:
One of the policy options for File Share is to specify folders in which files will not be encrypted:
Prevent the encryption of files in the following folders
If a protected file is copied or moved to such a "blacklisted" folder, it is automatically decrypted.