Difference in encrypting a sparse bundle for Time Machine before or after mounting the drive? I created a sparse bundle to use as my Time Machine back up

hdiutil create -size 800g -encryption -type SPARSEBUNDLE -fs "HFS+J" -volname TimeMachineEncrypted TimeMachineEncrypted.sparsebundle 


When I mount the drive I need to use my passphrase to decrypt it. Once mounted I examine the drive in Disk Utility and see that it is not encrypted. 

What's the difference in encrypting the image bundle and the mounted drive?
Is one better than the other performance, security, and automation wise?
Encrypting via Disk Utility after the sparseimage is created consistently failed with

Mounting disk
Unable to create a new Core Storage logical volume group.
Operation failed…

The answer to my question is that encrypting the mounted drive is not an option, the image must be created with the encryption flag.