They can, the idea is that they can mine more efficiently by storing the scrambled version rather than storing it unscrambled and re-scrambling when they need to generate a mining proof.

The miner has to serve the "scrambled" data (or derived proof). The "scrambling" is slow enough that the miner cannot do it in realtime. It's in the whitepaper.

It's probably encrypted with the owner's public key, just an educated guess though.