Why are outgoing connections through Tor less secure?
Hmm, they use "
slightly" there.
Maybe it has something to do with "
Sybil Attack" where the Tor exit node might able to isolate your node to the rest of the network by connecting you to his 'bad Bitcoin nodes'.
But since it's extremely hard to pull-off since all of your peers has to be the attacker's nodes, it's a "
slightly less security" issue.
Your node will still connect/listen to Bitcoin nodes on Tor with the setting ticked.
On top of that, Bitcoin Core already fix many of known sybil/eclipse attack vector as stated on
http://web.archive.org/web/20220412122303/http://cs-people.bu.edu/heilman/eclipse/.
2. Unless you and other node use encryption (this is recent addition based on BIP 324), the connection isn't encrypted.
From the other person's Bitcoin node to your exit node? Yes, but from your node to the exit node the connection is encrypted.
That's right, which is more reason to use newer Bitcoin Core which use encryption when connecting to other new nodes.