I received the following error message when trying to open an Excel spreadsheet:
We're sorry. We can't open the workbook in the browser because it uses these unsupported features: • Workbook encryption
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Excel web app doesn't support all features. That is the reason you are receiving this error message.
Try opening the file in Excel client application instead. Or remove the unsupported features and then use Excel web app.
As you can read here - https://support.office.com/en-us/article/Differences-between-using-a-workbook-in-the-browser-and-in-Excel-F0DC28ED-B85D-4E1D-BE6D-5878005DB3B6 - Encryption is not supported.