When MariaDB 10.1.0 introduced table options for encryption and compression, it unnecessarily changed ha_innobase::check_if_supported_inplace_alter() so that ALGORITHM=COPY is forced when these parameters differ.
A better solution would be to move the check to innobase_need_rebuild(). In that way, the ALGORITHM=INPLACE interface (yes, the syntax is very misleading) can be used for rebuilding the table much more efficiently, with merge sort, with no undo logging, and allowing concurrent DML operations.