I was going by this update for EKS https://aws.amazon.com/about-aws/whats-new/2020/03/amazon-eks-adds-envelope-encryption-for-secrets-with-aws-kms/ and this blog from AWS https://aws.amazon.com/blogs/containers/using-eks-encryption-provider-support-for-defense-in-depth/.
This is a very cryptic line which never confirms whether EKS encrypts secrets or not by default
In EKS, we operate the etcd volumes encrypted at disk-level using AWS-managed encryption keys.
I did understand that:-
Because Kubernetes by default does not encrypt data . Source
Kubernetes Secrets are, by default, stored unencrypted in the API server's underlying data store (etcd). Anyone with API access can retrieve or modify a Secret, and so can anyone with access to etcd. Additionally, anyone who is authorized to create a Pod in a namespace can use that access to read any Secret in that namespace; this includes indirect access such as the ability to create a Deployment.
I think I found it, the blog and update post by aws are very cryptic.
According to docs and console :-
All of the data stored by the etcd nodes and associated Amazon EBS volumes is encrypted using AWS KMS.
Using KMS with EKS is additional encryption or a better way of envelope encryption. It allows deploying a defense-in-depth strategy for Kubernetes applications by encrypting Kubernetes secrets with a KMS key that you define and manage.