As mentioned in the above post, mIRC v7.33 added support for encrypting server passwords in servers.ini. However, when you connect to a server, the actual password is used. So you should not see any difference when using a bouncer.
Even using the $server() identifier with the password property will return the actual password. The only way that you would see an issue, that I can think of, is if you are using a script that directly reads and parses the entries in the servers.ini file without using the $server() identifier.
As far as I know, selecting "blowfish" on your bouncer only affects messages from the bouncer to the server. This setting is not related to mIRC.