According to Microsoft:
An Enhanced Storage device can be an external USB hard drive or a USB flash drive. When you purchase a USB hard drive or flash drive, the packaging might indicate that it's an Enhanced Storage device.
Microsoft have created a technology that helps protect user data on portable storage devices that allows for additional security.
In their own words:
Enhanced Storage devices have built-in safety features that let you control who can access the data on the device by using a password or a certificate (if the device is being used in a workplace). Once someone has access to the device, they have access to the data because the data on the device is not encrypted.
However, in regards to encryption, Microsoft states:
Some device manufacturers might offer encryption on Enhanced Storage devices. Check the device packaging or documentation to see if the device includes encryption.
(I will investigate how to turn Enhanced Storage off, but I have a feeling you won't be able to because it is implemented on the external device itself... I will report back with a more definitive answer though.)