This is a secure way to protect sensitive data in the state file, as it will be encrypted at rest and in transit2. The other options are not recommended, as they could lead to data loss, errors, or security breaches.

The execution plan for terraform apply will not be the same as the one you ran locally with terraform plan, if your teammate manually modified the infrastructure component you are working on. This is because Terraform will refresh the state file before applying any changes, and will detect any differences between the state and the real resources.

Confidentiality: UsingHCP Terraform/Terraform Cloud's private registrykeeps the module configurations within your organization, ensuring privacy and access control.
Version Constraints: The private registry supportssemantic versioning, allowing you to manage versions of your modules as Terraform does natively.
Browsable Directory: The private registry offers a user interface to browse modules, making it easy for users within the organization to locate and manage modules.
This setup aligns with HashiCorp's design forprivate registry supportin Terraform, meeting all listed requirements for secure, version-controlled, and searchable module storage.