wordpress do not encrypt anything at client side, but encryption on client side do not help at all with security, it just make password stronger but do not help at all against Main In The Middle, or eaves dropping attacks. No matter how strong is your password encryption, if you send it over HTTP, once I know it, lets say by monitoring wifi traffic, I can use it myself.
Using HTTPS is the only real solution as the protocol layer ensures that everything is encrypted in a unique way per each connection therefor no one can repeat the same packets and gain access as it will fail in the protocol level.
short answer: with HTTPS you don’t need to “encrypt” the passwords you send on the wire.
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