Encryption problem?

No error - grab an instance of any config class, update the properties as needed, and pass it in.

PHP Code:

$config = new Config\Cache();
$config->backupHandler = 'file';

$cache = Services::cache($config, false); 


So, the answer to my question is config overriding is allowed, but it has to be done using the right stuff. The docs should be explicit about that. (I'll submit a PR with updated documentation.)