One potential issue is that when syncing fails you may have to do conflict resolution. Conflict resolution on ciphertext is really hard. I've actually done it (with cfs and coda), but it is very painful.
So I would lean towards having ciphertext on server, mount it with ssh, encfs it to plaintext, and unison from local plaintext (perhaps via encfs) to server plaintext. But I have never actually tried this.
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