Home storage encryption: files path? key type?

encryption
10

#1

Before server-side encryption was enabled, files are stored in data/user_name/file/

On oC 10.0.7 and Default encryption module 1.3.1 with home storage encryption enabled using User Specific Key encryption type, where are the files now?

From a fresh install, is it better to use User Specific Key or Master Key?

The documentation stresses that encryption is mainly for remote storage. With oC on a hosted server, is it helping to secure the home storage to some degree? Despite keys stored on the sever, wouldn't an attacker still need to know the user's login password to decrypt the files?