I confirm this bug with an encrypted key. In my case the problem was
that the keyfile was inside a drive that was not mounted at boot. So nm-
applet tried to open a non-existent file, and the result was an error
message saying the key is not encrypted. This should be fixed

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https://bugs.launchpad.net/bugs/1339607

Title:
  "Unencrypted private keys are insecure" message is vague and unhelpful

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