I’m not sure I understand you - in DT encryption is implemented using standard encrypted disk images. That way database and storage encryption are identical. It is possible you use an additional password for sync, but that is a completely separate business.
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I was not talking about encrypting a volume (why would I?) but about encrypted databases. Although @Blanc is of course right: The underlying technique for encrypting databases in DT is volume encryption.
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Which database is actually affected, where is it located in the filesystem and what’s its extension?
It’s database “Personal”, located in Databases directory, extension is .dtSparse (when closed if it matters)
In that case it’s an encrypted database (based on an encrypted disk image). Contrary to regular databases encrypted databases require a maximum size (see New > Encrypted Database…) and there’s probably not enough space left on the encrypted disk image.
The easiest solution is to create another encrypted database and to move everything from the old one into the new one.
why not simply resize it using disk utility?
This doesn’t seem to be possible in case of sparse images (just tried this again).
Curious, does DEVONthink display warning when DB’s about to run out of space?
It does obviously (see first post)
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It certainly works for me (on Big Sur): I renamed the database test.dtSparse to test.sparseimage, opened Disk Utility, selected Images/Resize, selected test.sparseimage, entered the password, entered the new size. Then renamed the file back to test.dtSparse.
I tried it on Catalina using a new test sparse image instead of an encrypted database. Maybe its volume wasn’t fully unmounted yet as I got an error message but now it seems to work indeed in case of a closed encrypted database. Obviously I never had to resize a sparse image, specifying a huge maximum size does it for me 
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I think I might have tried it on Catalina once, and it didn’t work; not sure. But Big Sur plays along 
It doesn’t, the question was if devonthink display warning when free space is about to run out. It obviously does when there is no more space left.
Not like it’s really needed I guess
Note: You can check the free space for an encrypted database via File > Database Properties.
Thanks everyone for the help. I ended up creating new encrypted database and moving all the data into it.
Glad to hear it 
That’s probably easier than updating to Big Sur and then changing the size of the database 
I just ran into this issue as well, and it is possible to resize an encrypted sparseimage in Catalina. You just have to use the command line (Terminal) instead of Disk Utility:
hdiutil resize -size 12g database.sparseimage
Change “12g” to whatever size you want to resize to – you can use “g” for gigabytes or “m” for megabytes.
Replace “database.sparseimage” with the full path to your renamed database. The easiest way to do this is to type out or paste the command into Terminal, leaving a space after the size (e.g. "…12g "). Then drag and drop the database onto the Terminal window. Press enter and you should be all set.
Just in case, I’d highly recommend making a backup copy of your database before running this command.
Are you suggesting running this while the database is open?