I just got off the horn with Moto support after running into the same issue.
It got escalated to L2 and now L3 (so expecting a call from their Moto X specific support team in the next day)
I had tried the encrpyt 10 times to no avail.
After the call on the side I decided to erase all content/settings and try again (I just got it today so I hadn't installed anything on it)
Retried after the erase and the 1st time didn't work, tried a 2nd time and now it's doing the encrypt...
So definitely an issue but just keep trying
