I turned it on, and it instantly enabled. I thought there was going to be a long transition to encrypt all data or transfer to an encrypted container, or whichever is the actual case.
Your data is already encrypted on the Apple servers. All this is doing is deleting the encryption keys on the Apple servers. So the only access to the encryption keys is on your devices.
iCloud uses strong security methods, employs strict policies to protect your information, and leads the industry in using privacy-preserving security technologies like end-to-end encryption for your data.