It's not a matter of data being encrypted, it's about the US authorities being able to demand decrypted access to the data of EU citizens from Facebook.
If the US believes that it's in a strong enough position that these companies can remain competitive while ignoring either US or EU law (and dodging enforcement) then it's welcome to not make amendments to the CLOUD Act. Otherwise it can have US companies lose market share(or suffer EU enforcement actions) or employ diplomatic lines to neuter or work around the law.
You can of course note that the same issue will arise going the other way (EU company operating in the US) but the cost for the EU is obviously judged to be less than what's gained by protecting their citizens (or that it's at least a good drum to beat to trade for other considerations from the US).
Schrems 2 is case primarily about US companies working with US authorities.
https://edpb.europa.eu/our-work-tools/our-documents/other/fr...
If I also remember correctly from reading up on Tutanota, it gets so nuanced, that to the US authorities it is enough that a single US employee of a non-US company has access to such data to summon them to disclose it?
Either way, Facebook is in deep shit.