Though there are a plethora of options for backing up your apps and data if you have root access to your device, for those without Superuser privileges, you basically have one option - the Android backup service. Even the backup apps like Helium that don't technically require root are simply front-ends for the backup service. The problems with this part of Android are well-known, extensive and, quite honestly, embarrassing. As if there aren't enough things to complain about with it already, it appears that some folks are having problems restoring encrypted (i.e. password-protected) backups made using this
feature last-resort functionality.
The symptoms of this bug are pretty cut and dry. Generally, if you create a backup using ADB, and encrypt it with a password, you may find yourself unable to restore it down the road. In my own testing on a Sony Z Ultra GPE and a Nexus 10, I was unable to get the backups to work if they had a password attached. Normally, a bug with so few complaints would be assumed to not be affecting a lot of people. In this case, however, it's probably a safe assumption that the reason so few have complained about it is because very few people are actually using Android's backup service in the first place.
At this time, we aren't entirely sure what's causing this issue, but I'd speculate that it could be a bug in the KitKat crypto manager, similar to the data encryption bug in Android build KRT16O that resulted in it being pulled very quickly and replaced with KRT16S.
Though there are no simple workarounds at this stage, some users have reported success using a tool called adbextractor to unpack the archive, then re-pack it without a password. After that, doing a normal "adb restore" from the command prompt should work.
The Android backup service needs a lot of work. Bugs like this go a long way toward demonstrating that. Perhaps one day, Google will give this thing the attention it desperately needs. Until then, at least this particular bug has been marked as "FutureRelease". Maybe that means that you'll soon be able to restore encrypted backups again. That's something, right?