Hello Dee Arch,
It is kind of fundamental that with a system that can both be online and offline, and be used both locally and via the web there can arise a temporary inconsistency of data. This is no different from any cloud storage provider that offers online access.
1) You create a file in the cloud.
2) It is synchronized to your device.
3) You take your device offline,
4) You use a different device to edit the file via the web.
Now you have the password situation I described, but described in document file terms with any cloud storage provider. It’s just how things must work if you offer both offline synchronized access, and online access via the web.
That we do offer this functionality is just so you can be sure to have easy access to your files regardless of our existance on the web, or the access to the web.
Also, AxCrypt is designed so no internet access whatsoever is required to decrypt your files. All the information required to decrypt a file is in the file – provided you know the password originally used to encrypt it.