Restoring Electrum from seed is no different than adding the private keys back into the wallet. Nothing will be changed but your master private keys will be back in the wallet unencrypted.
Only if you have NO password set... if you set a password, all sensitive info like Seed and Master Private Key (xprv) will always be encrypted in the wallet file (even if the wallet file itself is unencrypted).So if you restore from seed and set a new password, your seed/keys are encrypted (and so is the wallet file if you leave the "encrypt wallet file" box checked which is the default)
