If the traffic is encrypted then they wouldn't see into it, but it would go through their servers, so in worst case scenario you'd be surfing from behind the Great Chinese Firewall
The traffic is encrypted between you and the server. They control that server, where it gets decrypted to be sent out over the public internet (where it may be encrypted or not depending on the site). You've introduced a man in the middle. You must trust that man (but that man also already controls the source code for your browser, which can also see all your traffic).