It's hard to be sure, but this feature looks more like CTCSS encoding rather than true encryption or "scrambling". CTCSS encoding means that the radios hear only other radios transmitting the same or common sub-audable tone as part of the signal. Other listeners on the channel will hear the transmissions but will not be able to break-in unless they identify and use the same CTCSS tone on their radios.
Radios with scramblers are available - but just how private they would be if someone really wants to eavesdrop is not known. When combined with CTCSS encoding, such a system may be quite acceptable especially if the system is used sparingly.
What you can use (legally) really depends on what country you are planning to use such a system in. It's hard to give a really worthwhile answer until that is known.