I was actually looking forward to a feature such as this.
I wonder if people are using systemd-homed with luks. I think systemd-homed can encrypt your home (and do other things) so I wonder if it’s redundant.
Yes, LUKS is just the crypto engine for any backing block device you fancy, and that includes flat files.
I mean, would you use both full disk encryption with LUKS and LUKS_home_directory at the same time?
I could imagine using both if you share a laptop with someone. FDE provides a layer of defense to the laptop as a whole, and then homed provides a layer against your nefarious laptop-mate. The same could apply to a multi-user server.