Do they happen re-encrypt if I change my credentials a bunch of times or do they use my first ever password which was 123456?
Edit: or since it is "derived" and not really password which is used for encryption -- the derived thing could well be the hashed password. We are doomed. They might as well serial number their user and use that as key then. Never mind.
Does that clear it up at all?
FYI these concepts are originated from military crypto. The foundations are solid. Implementation... well you know how that always is.... one CVE away from perfect!!
But of course, we are talking about local backups so if you have full-disk encryption or back them up to an encrypted virtual drive, you don't even need whatever encryption comes with them.