Q: How does password protection on Notes work

Recently Apple introduced password protection for your Notes, but I cannot seem to find out exactly how this password is used to protect your notes.  I am curious about the technical implementation of it.

Correct me if I am wrong, but your Notes are encrypted in iCloud and your device has its own encryption.  The addition of the password means someone cannot just open a note on your device, but if someone got a hold of your device would they be able to get around the password somehow or is it used in some form of extra encryption?

Thanks