When you enter your passcode while enabling backup, you’re letting iOS decrypt your data and reencrypt with the key used for the backup.

Local backup key strength depends on the key. iCloud depends on the law.

You can because (presumably) the backup is encrypted with a key that is derived from your iThing credentials not with the phone hardware encryption key which is derived among other things from the screen lock passcode.

But if you lose the passcode to your screen-locked or unpowered device any way of getting data (that has not been backed up) out of it, while it's locked or turned off implies a security flaw even if done via a firmware signed by Apple.