Is there a way to check if Google Drive is scanning folders other than the ones I have synced?

I have a piece of software that monitors C:\Folder1. It keeps it in sync with C:\Folder2. It encrypts everything in C:\Folder2. I want to sync Folder2 to my Google Drive. But this additional encryption step is silly if they could scan my entire file system now that they're downloaded to my machine. Is there a way to check what files a program accesses? Is it already common knowledge that Google does this?
http://dlvr.it/SjHV3D