@Loneqd Welcome to the forum!
All client apps (browser extensions, Desktop app, etc.) work on the same design principle. While the app/extension is open and unlocked, the decrypted vault contents are stored in volatile memory. After the app/extension is locked (but open), or if the app or browser is closed, then the decrypted data are purged from the device memory. For as long as the app/extension remains logged in (even if it is locked or closed), a copy of the encrypted vault contents is kept in persistent storage (e.g., saved on the hard drive) of your device; this copy is sometimes called the vault “cache” — every client app instance has its own vault cache, so there can be multiple copies of the cache stored on the same device. When you log out of an app or extension, then the corresponding cache is purged, meaning that it no longer contains any of the encrypted vault data that was previously stored there.
I don’t know where you get that idea, but the whole point of vault encryption is that encryption is not possible unless an attacker knows (or can guess) the master password. As long as your master password is sufficiently strong to be uncrackable, your encrypted vault cache will remain an inscrutable blob of gibberish to anybody who has acquired a copy of it.