Proxy settings page states that with explicit settings a password gets encrypted:
choco config set proxyPassword <passwordThatGetsEncryptedInFile> # optional
https://github.com/chocolatey/choco/wiki/Proxy-Settings-for-Chocolatey#explicit-proxy-settings
Being precise, is it really encrypted or is it hashed?
The password is encrypted.
You can see that in action here:
With the implementation being here: