First of all, you are using open source code and, I would like to think you are paid to create your client's app, what is the problem with supplying them the source code they PAID for.
Secondly, I haven't personally heard of any encrypted php code that have not been broken. So if your client really wants to steal the code they PAID for, they can have it fixed.
Before deciding to learn CakePHP and develop my own application, I purchased a copy of PHPCOW and the most aggravating thing with that was that all their source code was ENCRYPTED and I did not know if beforehand. I could not improve on anything because of it. They pushed me to learn CakePHP and because of that, I thank them.
I have spent countless hours developing my application, which have NEWS, PHOTOS, VIDEOS, USERS, ACL, AUTH, etc and when I am done I will be glad to share it with everyone. Because I have used alot of help from the CakePHP community, including advice, plugins, and the core code.
I truly believe that all code developed on top of CakePHP's core needs not be ENCRYPTED.
How about if CakePHP or any other frameworks out there decided to encrypt their code.