This message means that Duplicati found an encryption key, but it was not the right one.
Did you by any chance run a “cleaner” program?
I am aware that some cleaner programs have a setting for “remove intranet credentials” or similar wording, that will actually wipe the Windows Credential Manager for all credentials.
Duplicati prior to 2.3.0.4 had a logic bug where it would create a new key if it could not decrypt the database. While this did not break anything directly, it can be really confusing if the real key was wiped, as you would see a key, but it would not be the right one.
Yes, without the key, the database cannot be decrypted.
If you have the backup configurations exported, you can rename the Duplicati-server.sqlite file to get a clean slate.
I will try to add a wipe-encryption method that will purge the database of encrypted content so you could run that first, and then go and manually enter the things that were wiped (encryption passphrase, destination url, etc).