To chime in and explain mostly to the Thunderbird devs what is going on:
The Send Later extension places messages in the user's Drafts folder for temporary storage until some specified time, at which point the message is to be moved into the Outbox and sent.
The Enigmail extension had an option for "Encrypt draft messages", which appears to be the default behavior now that PGP is bundled with Thunderbird, and no user-facing option seems to exist to disable it. Unfortunately, that means that the messages are then encrypted with the users own public key, and if they were then moved to the Outbox and sent, the recipient would receive a message that they would not be able to decrypt. In order to avoid that possibility, Send Later simply ignores encrypted messages, and displays a warning message (which used to be "Error: encrypted" and has since changed to the "Enigmail compatibility issue" message, thus the discrepancy between the two reports above).
There is an open discussion about this on Send Later's Github repository, here:
If any of the Thunderbird devs has suggestions about how to approach this issue they would be appreciated. In particular, some users have noted that the PGP keys must be stored in memory, at least during an individual Thunderbird session, since Thunderbird apparently decrypts messages fairly transparently from the user's perspective. If there is some reliable way to access the decrypted contents of messages in the Drafts folder, then maybe this could be handled on Send Later's side.
However, to my knowledge there is no way to work around this unless users are allowed to disable encrypting draft messages. If nothing else, it would be great to disable that feature when the user has configured their drafts to be saved in "Local Folders/Drafts", since there's not really a good reason to encrypt messages in that folder anyway.
I'm taking a sort of hands-off approach to this issue since I don't use PGP, but I know that this is a high priority for some Send Later users. I just wanted to chime in and give some context for what these bug reports are talking about, since they sound a bit cryptic to anyone who hasn't already been involved with that discussion.