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Hello dan,
You probably using the obsolete, unmaintained version 1.7 of AxCrypt. Version 2 gives a clear explanation in a pop up the first time you open a file.
The pop up says: “We’re doing this without asking for your password again!
You’re signed in, so we won’t ask for your password to encrypt, decrypt or open documents.
Your documents are still safely encrypted with your password.”
This is the same for AxCrypt 1.7.