We did not test under Windows at all, but under Linux. And it doesn't work here. The IDE refuses to compile with: "Unable to write state file for project Project
Error: Unable to create file ".../lazarus/304-trunk/lazarus/examples/database/sqlite_encryption_pragma/lib\x86_64-linux/project1.compiled"
Or how do you think we even came across the problem? ,-)
We believe that even if the IDE has built in so much special intelligence to be able to handle this automatically, it wouldn't hurt to have "$(DirectorySeparator)" in the examples anyway. Just to be sure. And it's instructive too.
The details: KDE Neon current (Ubuntu 18.04 based), which should be quite irrelevant, Lazarus 2.1.0 (SVN rev. 60786M) setup with fpcupdeluxe-x86_64-linux, FPC 3.0.4