All data stored and backed up in your Atlassian Cloud instance
No vendor access to the data
Protected Fields is created by;
Navigating to Custom Fields.
Click Create Custom Feld
Click All, and search for Protected, all protected field types will then be listed.
Select the type needed and click next, give it a name and create the field and associate it to Issue Screen(s)
Once the field is created it show up under Protected Fields in the Project navigation, where you can configure the permission for the field.
Read more on how to use the app.