Seems like encryption settings are not passed correctly, but this affects configuration without encryption as well.

Scenario:

• create new host "Test host" in new group "Test" with all default parameters;
• create new proxy "Test proxy" to monitor "Test host" with all default parameters;
• go to Administration -> Proxies, select "Test proxy" and press Disable hosts button.

In this particular scenario one gets:

Cannot update host encryption settings. Connection settings for both directions should be specified.

In different scenarios there can be different errors, I have not checked them all, but Disable hosts button is more likely to fail than not to fail.