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I'm confused. I thought iCloud was end-to-end encrypted anyway, and I've never heard of ADP before. Is ADP encryption at rest, whereas normal iCloud storage is only encrypted from the device to the server?

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The only difference is Apple doesn't hold the encryption keys when you use ADP.

In both cases it's encrypted in transit and at rest.

TIL that Apple holds the keys to my iCloud encrypted data!

For most of it, yes. There are exceptions, e.g., Health and Keychain, for which Apple does not have the keys even without ADP enabled.

Yes, otherwise, how would the web interface (iCloud.com) work?

Or account recovery

See the "Data categories and encryption" section:

"The table below provides more detail on how iCloud protects your data when using standard data protection or Advanced Data Protection."

https://support.apple.com/en-us/102651

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