If something goes wrong with your Mac accounts, you may still be able to gain access with the Recovery Key.
FileVault hardens macOS by wrapping a layer of login protection around the part of the startup volume that holds your files and other data. With FileVault disabled, the data on that volume is effectively just one password away between an attacker and your files. That’s a dangerous situation if someone has physical access to your computer–in your home or office or because they’ve stolen it–they might be able to employ known and not-yet-discovered methods to bypass the login and access the drive’s contents.
FileVault on all Macs puts an additional bar in place: your startup volume (or, as in the case with macOS Catalina and later, the startup data volume) is encrypted and its files are unavailable unless and until there’s been a successful macOS login. Only after the login does macOS enter its normal operation mode. For Intel Macs without a T2 Security Chip, FileVault also encrypts the contents of the startup volume’s data when the computer is powered down. Intel Macs with a T2 Security Chip and on all M1 Apple silicon Macs always encrypt this data. (Read our explanation about how T2 and M1 Macs interact with FileVault.)
The strong security FileVault offers can be a double-edged sword: it may deter attackers with physical access but it could block you, too. Suppose you forget your password (unlikely, I hope!). Or something in macOS breaks or is corrupted in the account login process or files–also unlikely, but judging by reader email, it happens from time to time. In those cases, you may be unable to gain access without possessing a component of the FileVault setup process.
Read more at MacWorld.com