I think this is excellent, its a step in the right direction, the ultimate would of course be the e2 function 128bit encryption. As much as it is easy to decode its still better than an exposed link - there are numerous reasons for this
As to whether this is only for a guest login, no .... its for any url that is sent to a user of the system
I think mailing embedding passwords in a link is totally wrong and a bad practice.Communication of any password should force the user to go through a reset of the password when logging in for the first time. This way the password always remains secure
If a NON guest user is sent a link then they must login first and then connect to the link, (that's if they are not already logged IN ). If you are mailing a Guest user and you require security around the process then they should not be a Guest user. However there could be a case where a Guest user can second guess other records from the make up of the url and access these records (like getting a list of the users being mailed)
I see this encryption purely for the purpose of hiding the process from anyone wanting to snoop and poke around and got nothing to do with protecting passwords. This goes for all users
One of the other things that come to mind is the use of PROTECT as a mechanism to secure data from other users. What if I am using one of the "Make Invisible" or "Hide" or "Applicability" features, does this have the same PROTECT vale of security - I don't think so (maybe support can confirm) But if this is the case a user with a valid login could begin to snoop around the system by second guessing custom url LINKS. That includes custom buttons and url links on forms