From the enter-passphrase screen in sync setup, canceling should only disable...

chrome/browser/sync/profile_sync_service.cc

 // Copyright (c) 2011 The Chromium Authors. All rights reserved.
 // Use of this source code is governed by a BSD-style license that can be
 // found in the LICENSE file.
 
 #include "chrome/browser/sync/profile_sync_service.h"
 
 #include <map>
 #include <set>
 
 #include "base/basictypes.h"
@@ skipping 413 matching lines @@
                        profile_->GetRequestContext(),
                        credentials,
                        delete_sync_data_folder,
                        notifier_options_);
 }
 
 void ProfileSyncService::CreateBackend() {
   backend_.reset(new SyncBackendHost(profile_));
 }
 
+bool ProfileSyncService::IsEncryptedDatatypeEnabled() const {
+  // Currently on passwords are an encrypted datatype, so
+  // we check to see if it is enabled.
+  syncable::ModelTypeSet types;
+  GetPreferredDataTypes(&types);
+  return types.count(syncable::PASSWORDS) != 0;
+}
+
 void ProfileSyncService::StartUp() {
   // Don't start up multiple times.
   if (backend_.get()) {
     VLOG(1) << "Skipping bringing up backend host.";
     return;
   }
 
   DCHECK(AreCredentialsAvailable());
 
   last_synced_time_ = base::Time::FromInternalValue(
@@ skipping 252 matching lines @@
   passphrase_required_for_decryption_ = for_decryption;
 
   if (!cached_passphrase_.value.empty()) {
     SetPassphrase(cached_passphrase_.value,
                   cached_passphrase_.is_explicit,
                   cached_passphrase_.is_creation);
     cached_passphrase_ = CachedPassphrase();
     return;
   }
 
+  // We will skip the passphrase prompt and suppress the warning
+  // if the passphrase is needed for decryption but the user is
+  // not syncing an encrypted data type on this machine.
+  // Otherwise we prompt.
+  if (!IsEncryptedDatatypeEnabled() && for_decryption) {
+    OnPassphraseAccepted();
+    return;
+  }
+
   if (WizardIsVisible()) {
     wizard_.Step(SyncSetupWizard::ENTER_PASSPHRASE);
   }
 
   NotifyObservers();
 }
 
 void ProfileSyncService::OnPassphraseAccepted() {
   // Make sure the data types that depend on the passphrase are started at
   // this time.
@@ skipping 570 matching lines @@
   // is initialized, all enabled data types are consistent with one
   // another, and no unrecoverable error has transpired.
   if (unrecoverable_error_detected_)
     return false;
 
   if (!data_type_manager_.get())
     return false;
 
   return data_type_manager_->state() == DataTypeManager::CONFIGURED;
 }