Cannot upgrade Mac OSX because my hard drive is encrypted

I wanted to upgrade from Big Sur to Monterey and after the download completed, I get this message, that I cannot upgrade because my disk was encrypted.

I got it working in the end! Coming from another bug I got the following solution steps, in order to get it working.

As you can see here in FileVault, there was a warning displayed, that were some users not being able to unlock the disk. The button "Enable users..." in addition to the button "Turn Off FileVault" were not clickable, so I troubeshooted that problem with this and came to this Reddit thread. The second answer from the first post was also needed to troubleshoot and fix the bug.

Short summary / tl;dr

1. Identify if your current or any user has Secure Token enabled with

   sudo sysadminctl -secureTokenStatus <usr>

2. Check every user on your system

• 2.1 Search for users

  dscl . list /Users | grep -v '^_'

• 2.2 Check the user with

  sudo sysadminctl -secureTokenStatus <user>

3. If for every user the return is Secure token is DISABLED for user <user>

   sudo rm /var/db/.AppleSetupDone

   for reenabling the Apple Setup Page

   and reboot normally

• 3.1 Setup a new user in the setup menu

  This user will have the Secure Token ENABLED

• 3.2 Go to Users & Groups and reset the other account's password

  The old user will now have his Secure Token ENABLED (again / reenabled)

• 3.3 Log out with the current (temporary) user

• 3.4 Log in with the old user

4. Check the update page again and update to Monterey The error should be gone

Same here, as interim solution i would try

• booting into rescue mode,
• deactivate DISK AES Encryption
• normal boot and install
• back to recovery and reactivate AES Encryption