Persistence Cookie Encryption

You are right there is near zero documentation on this. I have experimented with it and it does encrypt cookie contents just like the HTTP profile option does. Regarding the "Cookie encryption use policy" setting the help tab in v11.6 says this

Specifies the way in which the cookie encryption format is used. The default is disabled.

disabled: Generates the cookie format unencrypted.

preferred: Generate an encrypted cookie, but accepts both encrypted and unencrypted formats.

required: Cookie format must be encrypted.