www.makemkv.com

I used to rip UHD discs using DVDFab, which installs a kernel extension on macOS computers called fabio.kext. This provided on-the-fly decryption between discs and macOS at the kernel level. Kernel extensions are now considered an older way to solve macOS functionality limitations and will soon be no longer allowed.

After switching to MakeMKV, I got the warning that the on-the-fly encryption was still enabled and could cause errors ripping discs. So I made sure to completely remove the DVDFab software from the computer, including the kernel extension. The warning persisted.

I then did a completely clean install of macOS after erasing the entire boot drive. No possible chance of any previous software remaining. I then installed a newly downloaded copy of MakeMKV and tried to rip a disc... and got the warning again.

I'm also getting the warning when I use MakeMKV to process ISO files (which had been created using DVDFab) to turn them into MKV files. I also get a different warning when processing these files, which I expected, namely that this file was "ripped using DVDFab or MacTheRipper and may contain errors." But that is as expected.

How do I get rid of this on-the-fly decryption extension warning and what could be causing it?

I've never used DVDFab so I'm not familiar with the warning you describe.

You could try the command which will print out all of the kernel extensions loaded by the system. I know you reloaded your system so the DVDFab kernel extension should be gone, but the kextstat command should give you additional evidence that is the case.

An old but maybe still relevant link: How to Load & Unload Kernel Extensions in Mac OS X