Perhaps it's useful to provide some clarification here. As the other user stated, Linux is set up for multi-user setups and provides logical protection, but you seem to misunderstand how operating systems and file permissions work.

If someone steals your unencrypted hard drive and boots into their own operating system, they are able to circumvent all access control and permissions on your hard drive. This is because when they mount your hard drive your operating system isn't running; they're simply reading the stored data, so the access control and permissions set up by your operating system don't mean anything. This happens with ALL operating systems (Linux, BSD, Windows, MacOS, etc.). Logical protection like access control is only useful while the OS is running, and it cannot help otherwise.

This is why encryption is important, because it prevents unauthorized access when the OS isn't running. If you'd like to see just how easy it is to access unencrypted data, make a live USB and boot into it on any unencrypted computer (assuming you have permission to do so if you don't own the computer). You don't even need to extract the hard drive in most cases to read file contents, you can simply boot into a live USB. The only situation where this isn't the case is when USB booting is disabled in the BIOS and the BIOS is password protected, but you could always just remove the CMOS battery to clear the settings to bypass the BIOS password anyway.

Unencrypted data will always be trivial to retrieve when the attacker is allowed physical access to your computer.

Simplified, there's two layers to data protection, physical and logical. Linux or basically any correctly configured modern operating system provides logical protection, i.e. access under the running OS is only granted to authorized users. Granted you can still put holes in here, e.g. a webserver is misconfigured and allows access to any user to all files it can read. However, from the OS perspective, everything is fine, as the webserver can still only read what it's allowed to.

Data encryption protects data at rest, i.e. when no operating system enforcing the logical protection is running. The case has already been described so I'm not gonna repeat that here.

It's important to understand that in general, these two measures are completely seperate from each other. Device encryption won't help against logical attacks, and logical protection won't help against offline attacks. You need both if you can't rule out an attack vector completely (i.e. your server sits in a secure safe that can't be opened by anyone not authorized to, then encryption might not be necessary).

No poorly not. Just as Windows by default. Systemd-homed is a solution for that but afaik its questionable if its ready. Would be great if Distros like Fedora shipped it by default.

An encrypted system rather than an encrypted user partition is still necessary, because attackers could replace system files or simply add a service that uploads your stuff somewhere, or manipulate sudo, or log your password etc.