Data left in an unencrypted state is stored in what we call “clear text”. That is, anyone who opens the file will be able to read its contents.
When you encrypt your files, their contents are scrambled. If someone opens the file without entering your encryption PIN or password, all they will see is gibberish. So in the off chance that the remnants of sensitive files still exist on your hard drive after a wipe, even an expert “bad actor” who can find and open your file fragments won’t be able to read them.