
The method above won’t work for web farms because IIS servers won’t be able to decrypt the connection string encrypted by each other. Here is the related documentation: Encrypting and Decrypting Configuration Sections Web Farms
#Encrypt and decrypt online registration
You can use ASP.NET IIS Registration Tool (aspnet_regiis.exe) to encrypt and decrypt your connections strings. This is why the connection strings should be encrypted.

This is definitely a security concern for your Production servers.
#Encrypt and decrypt online password
It means that connection specific information such as database name, username, and password are stored as a clear text in a file. The connection strings are mostly stored in web.config.

For example: a connection string can tell your web application to connect to X database at ServerA by using Z username and Y password. Web applications use connection strings to connect to databases with certain credentials and other configuration.
