How do I clear Recents List in Catalina

If you mean the ones you see in application’s Open Recent, there is a Clear Menu at the bottom.

If you mean the Recents as you may find in a Finder window Sidebar, we have no control over it. It is an application embedded in the Finder itself. For more control, just create one or more Smart Folders and you will decide what goes in them.

Smart Folders CAN of course be placed in Sidebar. This can be done when they are created (by ticking a box) or at any other time (by dragging to the Sidebar).

Recents - the one in the Sidebar- is er... recent (since Mojave, I think, replacing the “All Files” in previous versions of the OS), and there never was a possibility to clear this.

You may be confusing hidden files with encrypted files.

Encrypted files show up in a Smart Folder, just as they show in a regular folder. You see that they are there, but need to enter the respective password to see their contents.

Hidden files are not visible in a Smart Folder, again just like they are not visible if you look at a regular folder that contains them.

You said: "Yes, I did mean the Recents in the Finder Sidebar." This:

The instructions you posted were NOT about this. They are about the recent documents that you see when you do File->Open Recent:

1. "What can you say about questions 3, 5 and 6?"

I had said it already:

3 - Smart Folders CAN be placed in the Sidebar

5 - Encrypted files will appear in a smart folder if they match that smart folder criteria. But to open them of course you have to decrypt them, just the same way you would when they are seen in a regular folder.

6 - It depends. It is easy to password protect pdf files; for other files it will depend, I guess.