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Unless Valve bakes in Full Disk Encryption, you'd have to come up with a janky work around & lots of manual effort. If you take a look through the https://wiki.archlinux.org/title/Category:Data-at-rest_encryption entries EncFS is likely your closest, viable option.
(Remember, SteamOS 3 is a downstream Arch distro like Debian > Ubuntu > Mint)
Wanting to keep an lean, appliance-like OS, there's many things they leave out for the kernel & other utils. The limited kernel modules would eliminate a full disk encryption via dm-crypt or ecryptfs[wiki.archlinux.org].
Instead, you'll likely be able to use EncFS[wiki.archlinux.org] on a per directory level given is uses the very common FUSE kernel feature.
No matter what, the Deck will experience a performance hit. But if you limiting it so very select directories - like account data direct and not steam/steamapps/common - that could be a fair compromise.
But, if you encrypt any data that is required when booting up to the default gamemode sequence, you could have a bad trip.
Please be sure to post your findings & experience. This is one area I've deeply explored on the Steam Deck.
Cheers, retro.
Now I'm using Cryptomator, It's good, but I think KDE Vaults has better workflow