Any distros you reccomend with these requirements
Free and open-source.
Receives regular software and kernel updates.
Avoids X11.
The notable exception is Qubes, but the isolation issues which X11 typically has are avoided by virtualization. This isolation only applies to apps running in different qubes (virtual machines), apps running in the same qube are not protected from each other.
Supports full-disk encryption during installation.
Doesn't freeze regular releases for more than 1 year.
We recommend against "Long Term Support" or "stable" distro releases for desktop usage.
Supports a wide variety of hardware.
Preference towards larger projects.
Edit: I'm new to linux
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Fedora, maybe?
Edit to make my point:
It is free and open-source.
Fedora has a rather fast release cycle. It offers new versions roughly every 6 months, along with regular package updates.
Has been using Wayland by default since Fedora 25, so it aligns with your preference to avoid X11.
Allows you to set up full-disk encryption.
Doesn't freeze its regular releases for more than a year.
Supports a wide variety of hardware and aims to offer the latest kernel and drivers.
It is a large project.
Also, not that it matters much, but it has a strong stance towards open-source software, not allowing closed software in its repositories. Although closed software can be installed by using RPMFusion
I think Fedora finds a good balance that
This was my immediate thought. It ticks all the boxes.