I tested with Xubuntu 21.04 iso and confirm the reported issue. Below is
what I tried.

1) Install with lvm+encryption option. 
2) Note down the recovery key. 
3) At next boot, use recovery key instead of passphrase that we set. 
4) The key unlocks the disk and we are able to login.
5) Once logged in, used 'luksChangekey' option to change the recovery key. 
Reboot.
6) Use the new (changed) recovery key. Key unlocks and able to boot into system.

Re-did the test but now with ZFS+encryption option. Step 3) fails to
unlock the disk if we use recovery key. After 3 failed attempts, we are
dropped to initramfs (busybox) prompt.

Decryption is OK if we use the passphrase we set.

Screenshots are attached below.

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https://bugs.launchpad.net/bugs/1926196

Title:
  Ubuntu 21.04 encrypted disk with zfs, fails to start/decrypt with
  recovery key

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