no - it is not safe - Linux always knows the correct time - based on hardware clock in UTC and the configured timezone.
If you change to local time - and dual boot windows - then may run into weird issues because both windows and Linux changes the the clock
This may produce errors of various kinds e.g. https certificate errors.
The safe and correct measure is to set Windows to use UTC.
The reason your system asks for decryption key before you select windows is because the grub menu is inside the encrypted Manjaro in the folder /boot/grub.
You can work around this by using encrypted root and unencrypted boot. You cannot easily change an already installed system - in your case I’d recommend reinstalling Manjaro.
There is forum topic dealing with the option of installing Manjaro using unencrypted boot.