
@Tushar Debnath, Thanks for posting in Q&A. Based on my checking in Intune, I find there's no such setting to disable "Encrypt "option in outlook in Intune. I only find the setting "Encrypt all e-mail messages (User) which used to configure if the outgoing messages are encrypted.
Meanwhile, I do more research and find you can manage whether to display Encrypt button in outlook on the web via Exchange Online PowerShell.
Also, I find we can disable the Encrypt-Only feature in Outlook via registry key.
You can try and see if the above methods can help.
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