Is "Documents" folder on iPhone secure? Is Documents folder of any app on iPhone secure? Can anybody access it with iTunes, or may be a third party program? Can I protect this folder with a password? (for example, Documents can be encrypted if I lock the device).

I would like to know this to correctly write a privacy policy for an iOS app that uses file sharing.
The visibility of the Documents folder for any given App since iOS 9 requires the developer to enable iTunes Sharing to make the contents of the Documents folder visible to iTunes (and presumably any 3rd party software that knows how to communicate with the device).  By default, file sharing is not enabled.

https://support.apple.com/en-us/HT201301

What you need for File Sharing


The latest version of iTunes.
The latest version of macOS or an
up-to-date version of Windows 7 or later.
An iPhone, iPad, or iPod
touch with the latest version of iOS.
An iOS app that works with File
Sharing.


Since iOS 11, Apple has introduced a new Files App that gives the user file visibility on the device.  Again, the developer needs to use an API to enable what is visible to the user.