It doesn’t ask for the password/pattern.
Message on the terminal output is:
“Could not mount /data and unable to find crypto footer.”
Oh, ok. I hadn’t checked with my LineageOS 14.1-encrypted data partition, but I did now, and I can confirm your finding. It’s the same as with the newer encryption.
@z3ntu: TWRP 3.3.0-0 also doesn’t seem to be able to decrypt Android 7 encryption. So regarding encryption, the Fairphone 2 TWRP 3.3.0-0 seems broken in general.