Adding a custom field of this this type to a project enables the following features:

Users creating or editing issues are able to encrypt values (client side, such that the confidential information is never sent to the server) and decrypt later (when editing the issue).

Decrypt the data and/or re-encrypt other information in the field when editing the issue

Users without edit-permission can decrypt the encrypted data when viewing the issue (and hide it)

-The information is never sent to the server (when encrypted or when shown decrypted)