- Why is it important to encrypt your wallet?
When wallet is encrypted and protected by passphrase, your coins are locked from being spent. Which means that even if an attacker gains access to the device on which your bitcoin wallet is running, he would not be able to do anything with the funds unless he has your passphrase.
- What is the risk of not having a password if an attacker gets access to your file system?
As soon as an attacker gains access to your file system, he would be able to spend coins from your bitcoin wallet instantly.