tl;dr: It should be fine, unless you have a lot of tracks.
Perhaps above 200 and from then on upwards, test it. Just like any complex system the only way to know for sure is to benchmark it. Create an Ardour session with a few hundred tracks and record + play.
not quite. Ardour streams data from disk during playback and writes to disk when recording. However data is cached in RAM (configurable in Ardour Preferences > Performance (by default 10 seconds per track), and the OS (Linux kernel) offers additional disk-cache.
The problem is not usually bandwidth (audio is only needs a few hundred kByte/sec), but seeking: Data is read from different locations of the disk. Encryption also spreads out data over the disk, so there is some additional overhead. This is mainly relevant for HDD, not SSD though.
En/decrypting data needs additional CPU, even though this is done low priority compared to DSP, it may still take away some CPU power that would otherwise be available to plugins.
I expect this is negligible for low track counts since it can be done in the background, but may be noticeable with a few hundred tracks.
sudo cryptsetup benchmark most algorithms can do ~ 1GB/sec. That will saturate at 10^9 [Byte/sec] / (48000 [samples/sec] * 4 [bytes/sample/track]) = 5208 mono tracks.