If a volume is created with the correct, encrypted volume type, and the backup is restored to the new volume, the restore succeeds.

For example:
openstack volume create --size 1 --type LUKS 'encrypted volume'
openstack volume backup restore aeb48e31-6476-454f-8faf-17e7bf803987 'encrypted volume'

However, it's still the case that doing a plain backup-restore without defining a destination volume will fail.

For example:
cinder backup-restore aeb48e31-6476-454f-8faf-17e7bf803987

This has the following stack trace:
ERROR oslo_messaging.rpc.server [None req-a257a2d9-b9d8-414b-a50c-7bc6c2ad2be6 demo None] Exception during message handling: EncryptedBackupOperationFailed: The source volume type '42544a34-db4a-4e41-94cd-7f7d7509537c' is different than the destination volume type '600773cf-d16d-4dd0-9168-7163f3ea6ec8'.
cinder-backup[3740]: ERROR oslo_messaging.rpc.server Traceback (most recent call last):
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/usr/local/lib/python2.7/dist-packages/oslo_messaging/rpc/server.py", line 163, in _process_incoming
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     res = self.dispatcher.dispatch(message)
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/usr/local/lib/python2.7/dist-packages/oslo_messaging/rpc/dispatcher.py", line 220, in dispatch
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     return self._do_dispatch(endpoint, method, ctxt, args)
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/usr/local/lib/python2.7/dist-packages/oslo_messaging/rpc/dispatcher.py", line 190, in _do_dispatch
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     result = func(ctxt, **new_args)
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/opt/stack/cinder/cinder/backup/manager.py", line 513, in restore_backup
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     backup.save()
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/usr/local/lib/python2.7/dist-packages/oslo_utils/excutils.py", line 220, in __exit__
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     self.force_reraise()
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/usr/local/lib/python2.7/dist-packages/oslo_utils/excutils.py", line 196, in force_reraise
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     six.reraise(self.type_, self.value, self.tb)
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/opt/stack/cinder/cinder/backup/manager.py", line 507, in restore_backup
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     self._run_restore(context, backup, volume)
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/opt/stack/cinder/cinder/backup/manager.py", line 542, in _run_restore
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     device_file)
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/opt/stack/cinder/cinder/backup/chunkeddriver.py", line 703, in restore
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     self.put_metadata(volume_id, volume_meta)
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/opt/stack/cinder/cinder/backup/driver.py", line 363, in put_metadata
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     self.backup_meta_api.put(volume_id, json_metadata)
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/opt/stack/cinder/cinder/backup/driver.py", line 342, in put
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     func(meta_container[type], volume_id, fields)
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/opt/stack/cinder/cinder/backup/driver.py", line 183, in _restore_vol_base_meta
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     metadata['volume_type_id'])
cinder-backup[3740]: ERROR oslo_messaging.rpc.server   File "/opt/stack/cinder/cinder/backup/driver.py", line 244, in _restore_vol_encryption_meta
cinder-backup[3740]: ERROR oslo_messaging.rpc.server     raise exception.EncryptedBackupOperationFailed(msg)
cinder-backup[3740]: ERROR oslo_messaging.rpc.server EncryptedBackupOperationFailed: The source volume type '42544a34-db4a-4e41-94cd-7f7d7509537c' is different than the destination volume type '600773cf-d16d-4dd0-9168-7163f3ea6ec8'.
cinder-backup[3740]: ERROR oslo_messaging.rpc.server