Note: AlexP has answered the question perfectly in his comment on this post, waiting for him to post an answer so that I can mark it as solved. There are other some complementary useful info in the comment regarding what is actually being encrypted/decrypted.
I'm wondering if the root users home folder is encrypted with regular home folder encryption, and if so how does it work? Since home folder encryption encrypts/decrypts on login, is booting the system considered a root users login?
Reason to why I wonder is because I want to protect my virtual machines with encryption in an logged out state (for my normal user) and also protect them from copying in an logged in state, this I know can also be done with user permissions.
So: When user is logged in I can run the VM with sudo, the VMs cant be copied by an adversary if they get my computer logged in, and if I log out they are encrypted. The simplest solution to me right now seems to move the files from the root home to user home.
Sorry if this is a stupid question and I've missed something obvious. Best regards.