Hi @Matt Dillon ,
Welcome to our forum!
Based on my research on Outlook 365 (version 2201 (Build 14827.20198 Click-to-Run)), I found the same two options under Encrypt as yours. But for the other encryption options you mentioned in outlook online, I found similar options in the drop-down box of Sensitivity, which is consistent with Andy.
In addition, through my test, I found that encryption and sensitivity options used to be displayed in the Encrypt drop-down box in the old version of Outlook(such as Outlook 2016). So if you need to add the Confidential options in your Outlook 365 client, it's suggested that you could add it in the drop-down box of Sensitivity.
For more information about sensitivity labels, please refer to: Apply sensitivity labels to your files and email in Office.
Hope the above help!
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