Unlocking and Decrypting FileVault-Encrypted Hard Disk on macOS Ventura

Your disk never finished fully encrypting. You can see that on the output from your terminal. It's Conversion Status is Converting (forward) and the progress is 60%. It's in a halfway state and now also many years old.

I would try to get it to mount again, and pull the files off if you can get it to mount. Unless there is a good reason, abandon the Filevault backups (which I assume are now years out of date and probably you are backing up elsewhere?). By a new external disk.

And as far at my advice goes, you will probably want to try something like DriveDx as already suggested by HWTech as part of the "try to get it to mount again" step.

I would not try to modify the TM backup drive in any way or you risk damaging the backup. It is unlikely that the encryption is the problem. Besides reverting the encryption will be very hard on the hard drive, plus if it never finishes, then you may have complicated getting access to the data.

I would be concerned that the old hard drive may be failing. I would suggest checking the health of the hard drive by running the third party app DriveDx (free trial period) and posting the complete DriveDx text report here using the "Additional Text" icon which looks like a piece of paper on the forum editing toolbar. You will need to install a special USB driver in order to access the health information on the external drive.

Also, are you trying to use the Finder to look at the TM backup, or are you using the Time Machine interface? You should be using the TM interface to navigate the backups.

Honestly, I don't know. You have the second worst uncorrectable error count I've ever seen on a drive (and the worst, at around 9800, was within the last month or so). I can't recall the outcome of that post, but I don't think it was positive.

If DriveDx detects the drive, it might be mountable (or DriveDx is getting saved SMART info from the d2 Quadra's controller firmware). If mountable, I would try to mount the drive read-only from the terminal to try and minimize the risk of more errors and then copy info off. If not mountable or you can mount but even copying is impossible because those bad sectors need to be read...you are back to the more expensive options.

That hard drive is failing. The 40 bad sectors which are still pending reallocation are the problem. They must be on a critical area of the drive since it has built up over 6.5K Uncorrectable Errors.

If you need data from this drive, then you will need to contact a professional data recovery service to see if they can recover data from a failing hard drive for a Time Machine backup. Time Machine backup drives are more complicated than a standard data drive so it is hard to say what can be done for retrieving data.

Even if this was a plain data drive, you would still need a professional data recovery service since macOS and most third party data recovery software are not able to handle all the errors a failing hard drive produces. The more attempts that are made to access the data, the more likely the failure will get worse where even a professional data recovery service may be unable to recover any data.

I do know that 2.5" Seagate hard drives are a pain to recover data from when they have bad sectors and usually require a professional data recovery service because the drive can become locked.