If you have "FileVault" (equal to hard disk encryption) enabled in System Preferences/Security, you should be able to boot from it. Provided you have enabled booting from external media in the Startup Security Utility on a newer Mac with a T2 chip.

Once it is set up, you don't need the software to unlock it. However, I am more critical about whether it can be used as a boot medium....

No, because decryption takes place via a programme. However, if you encrypt manually with a tool (e.g. Veracrypt), this would be possible.