A client that has chosen to only allow encrypted transfer connections should send this error when a user without ADCS support tries to initiate a tranfers connection with him. AirDC++ 2.50 uses code 62 for this error. The STA message should also include"TO" parameter, which contains the token of the requested transfer connection.
This is now in upcoming ADC-Ext 1.0.8. I have some objections/suggestions to it, but since there is a) a spec and b) an implementation in the wild, I see it only as a necessity to document it.