Is the OST cache file created by Outlook encrypted? I understand that Outlook won't open the file unless it can connect to the user's Exchange account, but I'm wondering if there's a possibility that 3rd-party tools would be able to sift through it and recover anything. Should I store it on an encrypted drive for better security? Has anybody found official Microsoft documentation on this?
No, it not seems to be encrypted. See here, here and here for some example.