You need to enable this feature in Nextcloud itself, it doesn't matter where it is hosted.
"Nextcloud features an enterprise-grade, seamlessly integrated solution for end-to-end encryption. It enables users to pick one or more folders on their desktop or mobile client for end-to-end encryption. Folders can be shared with other users and synced between devices but are not readable by the server. "[1]
EDIT: so i just checked, it seems Hetzner doesnt have the E2E option that Nextcloud has switched on, since it's deemed unstable.
so one could use a tool like Cryptomator to encrypt folders locally and send that folder to the cloud [2]
> so one could use a tool like Cryptomator to encrypt folders locally and send that folder to the cloud
Yeah I already use restic, which I believe is similar (E2EE backups to cloud). But I don't need Nextcloud for that :).
I was actually interested in the Hetzner managed Nextcloud for e.g. my family, so that I can move them away from Google Drive/iCloud. I can't reasonably ask my family to use cryptomator or restic :D.
Also, in one company where im the IT guy, ive been self hosting a Seafile instance for years without problems.
So there are plenty of alternatives out there.
[1]https://www.hetzner.com/storage/storage-share/