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Secure Startup Device Encryption question on S9

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I have Secure Startup encryption enabled on my S9 and all I need to know if that only encrypts the files on the phone only when the phone is totally powered OFF or will it encrypt all the system files and personal files even if the phone is powered ON but LOCKED by the Screen Lock?  If that is not the case, will I need to use a third-party app to encrypt my files or even Samsung's Secure Folder app?

 

I know Its even possible to just transfer all the sensitive files to an SD card and encrypt the SD card, but to be honest, I don't trust those because they may get corrupted resulting in data loss. I just want to keep all data to internal storage.

Thanks in advance!

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