John, The default pre-selected option is "Require password..." and at that time 
the encrypt option is available. Only when the user changes the pref, it would 
be noticeable that the encrypt option is disabled. User is taking a conscious 
action in making the change and would realize that the first pref does not come 
with an encrypt option.
A similar example where option is not available is the Preferences > Mouse > 
Accessibility tab. "Dwell Click" options. 
Notice the checkbox/combobox options are not available until one of the 
respective radiobutton option is selected.

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https://bugs.launchpad.net/bugs/694283

Title:
  "Encrypt my home folder" should be disabled when "Log in automatically" is 
selected

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