No, anything including and after the # is not seen by the server. Here is a screenshot from Fly that shows what it looks like from my end:
https://imgur.com/a/41XxtHJIf someone were to go to just the /sha256/sha256 link without the encryption key bookmark appended to it, they would see: Decryption failed: ChaCha20Poly1305 key must be 32 bytes.
Or with a wrong key they would see: Decryption failed: