There is still a huge security issue. Any provider can dump the memory of the VPS node and extract the decryption key. But for that the VPS node must be online and the key must be in the memory.

To avoid this you should use VPS providers which use AMD EPYC because then it is possible. to encrypt the memory without any chance to extract data. Its called SME (Secure Memory Encryption). Not all providers have activated it. On our Netherlands location it is activated.