You are talking about two different things. If a file is encrypted, only users who know the pass phrase or who have enough compute power to determine the pass phrase by brute force can read the plain text version of that encrypted file.

The topic of this thread, however, is how can a user encrypt a shell script file and let another user who does not know the pass phrase used to encrypt that script run that script without being able to read it as clear text. And, the answer is that it cannot be done.

If a script is obfuscated by its owner and can be run by somebody else without knowing the obfuscation method used, then anyone who has read access to the file can also read the clear text of that script and/or run the file.

And, if a file is made unreadable just by changing its mode, that will not keep any root user on that system from reading that file (both because root can read any file with any read permission bit set and because root can change the mode of any file to any mode they choose.)