When you turn on sync, all your profile information is saved to your Google Account. If you don't want to sync everything, you can change what info is saved.
With a passphrase, you can use Google's cloud to store and sync your Chrome data without letting Google read it. Your payment methods and addresses from Google Pay aren't encrypted by a passphrase.
Passphrases are optional. Your synced data is always protected by encryption when it's in transit.
If you’re having trouble syncing with your passphrase, you may have to update Google Chrome to the latest version.