I cannot confirm. I still use Okular 23.08.5 due to Leap 15.6 (it’s the almost recent version in 16.0). I recently opened and properly viewed several password-protected PDFs. On opening them there showed up a dialogue for entering the password and then the PDF was displayed.
Unfortunately, I can’t share my password-protected files because they’re from a bank. When I have some free time, I’ll try generating one myself and see if Okular can open it.
gunnersson@tulicube:~/Downloads> okular encrypted.pdf
Couldn't start kwalletd: QDBusError("org.freedesktop.DBus.Error.ServiceUnknown", "The name org.kde.kwalletd5 was not provided by any .service files")
Couldn't start kwalletd: QDBusError("org.freedesktop.DBus.Error.ServiceUnknown", "The name org.kde.kwalletd5 was not provided by any .service files")
Couldn't start kwalletd: QDBusError("org.freedesktop.DBus.Error.ServiceUnknown", "The name org.kde.kwalletd5 was not provided by any .service files")
Couldn't start kwalletd: QDBusError("org.freedesktop.DBus.Error.ServiceUnknown", "The name org.kde.kwalletd5 was not provided by any .service files")
Couldn't start kwalletd: QDBusError("org.freedesktop.DBus.Error.ServiceUnknown", "The name org.kde.kwalletd5 was not provided by any .service files")
Couldn't start kwalletd: QDBusError("org.freedesktop.DBus.Error.ServiceUnknown", "The name org.kde.kwalletd5 was not provided by any .service files")
QWidget::setMinimumSize: (okular_sidebar/Sidebar) Negative sizes (0,-1) are not possible
okular
kf.kio.core: KFileFilter::fromMimeType() called with empty input
GPL Ghostscript 10.06.0:
**** This file requires a password for access.
KCrash: Application 'okular' crashing... crashRecursionCounter = 2
QThreadStorage: entry 10 destroyed before end of thread 0x55c353e446d0
QThreadStorage: entry 9 destroyed before end of thread 0x55c353e446d0
QThreadStorage: entry 8 destroyed before end of thread 0x55c353e446d0
QThreadStorage: entry 2 destroyed before end of thread 0x55c353e446d0
QThreadStorage: entry 1 destroyed before end of thread 0x55c353e446d0
Aborted (core dumped) okular
Strange, this solution. On my system Okular asks on an encrypted PDF for kwallet, too. And it’s not installed. But, that it’s a stopper when installed, that is questionable I think.