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Hi @Claire Wink welcome to the Atlassian community.
Your use case is unique and I couldn't quite connect to the reason for uploading a password protected document to Confluence. You can instead attach a word converted PDF which can't be edited given the organization's pdf restrictions.
Given, the Confluence tool is to provide transparency and smooth collaboration between teams, when you upload a password protected- doc, what are you trying to achieve? OR what kind of restrictions are you planning? etc... etc.
Alternate to the pdf file type attachment, there is a marketplace plugin namely, "Encrypted Content for Confluence" that protect your data with a password to avoid unauthorized access. Kindly see if that plugin address your current requirement.