I think it is not possible to properly handle encrypted sparse data blocks without compromising security. The main data block size is 64kB long, so encrypted block should be more than 64kB long. Now, if we have a sparse block then its size is tens of bytes instead of 64kB, so encrypted block will be at the tens of bytes too not 64kB. So, if we have an encryption stream with a number of 64kB blocks (block boundary information is available on volume) and suddenly we will got a short block then for sure it will be a sparse block (I'm sure sparse block has its own stream number), then we can predict content. It is not good for security if we can predict original content. Think about it.

best regards