Looks like it’s behind an experimental flag, only applies to new rooms, and isn’t available on the public app.element.io instance right now (the Labs screenshot they showed doesn’t show the option on element.io+matrix.org when I checked just now):

github.com/element-hq/element-web/pull/31513

For it to work, looks like it needs another in-progress feature to allow new members to decrypt previous messages (Matrix can’t do that yet???):

github.com/matrix-org/…/4268

(That one isn’t even in the spec yet, it’ll take a lonnnnnng time before we see any real movement on it, possibly a year or two. A year or two before you can see encrypted messages from before you joined a room. Insanity.)

A contributor calls this encrypted metadata feature a “partial prototype:”

github.com/element-hq/element-meta/issues/1214#is…

Pretty crazy they’ve been discussing this for nearly 10 years and it’s just now “a partial prototype,” but that’s Matrix for you.