Capture tries to encrypt for no reason.

(defun org-at-encrypted-entry-p ()
  "Is the current entry encrypted?"
  (unless (org-before-first-heading-p)
    (save-excursion
      (org-back-to-heading t)
      (search-forward "-----BEGIN PGP MESSAGE-----"
                      (save-excursion (org-end-of-subtree t)) t))))

My guess is that going to the end of the subtree is wrong.  It should
be to the end of the entry.

That should also speed up capture.

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