How security services work depends on whether Replication Server (or Adaptive Server or other data server) is acting as client or server.
Clients use the security mechanism to ensure a secure pathway to a remote server. Replication Server logs in to remote servers (acting as a client) and also accepts incoming logins (acting as a server).
Replication Server, when acting as the client, uses the security mechanism to ensure a secure pathway to a remote Replication Server or Adaptive Server. Once the secure pathway is established, the security mechanism can provide message protection. When Replication Server acts as a server, it accepts or rejects logins based on its default security settings.