The Teracube 2e TWRP as it currently stands does not support any form of encryption, whether the storage was formatted from inside TWRP or from a different recovery. You can sometimes get around this by fully disabling your screen lock and therefore encryption, but this will wipe your fingerprints and other biometric data every time you need to access TWRP in a useful fashion.
Regarding the OTA, it depends on how the /e/ OTA is signed. If they made 2e or the yk673v6 as valid device names and haven’t just locked it to Teracube_2e as the official OTA does, then you should be able to use a corresponding TWRP to perform the OTA after temporarily disabling encryption. But… as I haven’t used /e/ and tried this, I can’t say whether or not the OTA is viable.
Personally I lost TWRP access when working through fixing Magisk on my device several weeks ago. I haven’t restored it yet, but would definitely consider trying it again after a new TWRP is released, especially if it had encryption support.