TS-WXL - Formatted with encryption but drives aren't encrypted

[emel5339]

I have an old, but reliable Terastation TS-WXL.  It's running the latest firmware, 1.72. 

It shipped with 2x1GB hard drives.  I set those up with encryption in a RAID 1 array. Last year, I replaced those with 2x4GB Western Digital drives.  Formatted them as XFS & GPT, selected encryption when I started the formatting.  When both drives were formatted, I joined them into a RAID 1 array and backed up about 1.25 GB of files to the Terastation.

But now when I look at the drives, they show as not encrypted.    Oops.  A few questions:

1) Is anyone aware of a limitation that prevents encrypting drives larger than the 1GB drives that shipped with the unit?
2) Is it possible to encrypt with files in place as I can do, for example, with Bitlocker on Windows?  (I realize this is optimistic.)  If not, I can transfer the files elsewhere and reformat/encrypt the drives, but only if it's actually possible with 4GB drives.

Thanks!