You do, but it might be that the option is greyed-out because the phone simply is encrypted. My Pixel 2 doesn't have an option in the settings to run unencrypted, it just tells you it's encrypted, end of story.
But was that "encrypt new data" already turned on? If that was on by default then everything you added to the phone would be encrypted anyway.
If you wanted to be really sure you could reset the phone, make sure that option is on, then fill the storage as full as you can (download movies until you can't fit any more, for example) to fill everything with encrypted data and then reset it again. Even create a temporary Google account for this (which you should remove before resetting, as above) so that none of your previous data are reimported). There did used to be apps that would fill your storage with junk for this purpose, in the days before encryption, but whether any still exist I don't know.