How does encryption work in LiteSpeed? Where and how are the password stored specific to the SQL Agent backup job?
It is stored in one of two ways:
1 - Clear text in the @encryptionkey parameter
2 - Obfuscated using the @jobp parameter
In this case the user either generates the job via the UI (which automatically uses this parameter) or they manually run the clear text password through the xp_encrypt_backup_key procedure which takes the clear text password and obfuscates it so it cannot be used for recovery
On the recovery side it works the same way:
1- You can supply the clear text password
2 - Or you can use the @job parameter with the xp_encrypt_restore_key procedure