TLS/SSL requires configuration on the DB2 server side as well as configuration on the client side. That might involve the user obtaining the GSkit code from IBM and installing that on the client.
The GSkit code is also used to generate SSL key database, certificates and password stash files that are referenced in the server/client DB2 configurations. That configuration is something that the users will do – outside of Toad for DB2. Once configured correctly and the users have cataloged their databases correctly using SSL, Toad for DB2 can connect to their databases just fine.