>In the After First Unlock (AFU) state, user data is decrypted
Note that this is a slight simplification because, I assume, the reality is irrelevant to understanding the topic:
There are a few different keys [0] that can be chosen at this level of the encryption pipeline. The default one makes data available after first unlock, as described. But, as the developer, you can choose a key that, for example, makes your app's data unavailable any time the device is locked. Apple uses that one for the user's health data, and maybe other extra-sensitive stuff.
[0]: https://support.apple.com/guide/security/data-protection-cla...
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