In a Cisco SD-WAN network, multicast traffic management is handled differently compared to traditional IP multicast methods due to the nature of the overlay architecture.
Multicast Service Routes: In Cisco SD-WAN, multicast receivers use the vSmart controller to request multicast streams. This is done via multicast service routes which the vSmart controller manages. The vSmart controller is responsible for maintaining and distributing multicast routing information to all edge devices in the network.
Process:
When a multicast receiver wants to join a multicast stream, it sends an IGMP join request.
The WAN Edge device forwards this request to the vSmart controller.
The vSmart controller then updates the multicast service routes to include the new receiver, ensuring that multicast traffic is appropriately forwarded to the joining receiver.
:
Cisco SD-WAN Multicast Configuration Guide
Cisco SD-WAN vSmart Controller Documentation

https://community.cisco.com/t5/sd-wan-and-cloud-networking/encapsulation-ipsec-on-vbond/td-p/4451149 "encapsulation" command under vBond tunnel-interface has no meaning and effect.

https://www.cisco.com/c/en/us/solutions/collateral/enterprise-networks/sd-wan/nb-07-cloud-router-data-sheet-cte-en.html