Problem adding files to encrypted .DMG folder

At the time you created the image from a folder, after you chose an encryption and provided a password, did you also select "read/write" as the image format?

Create a disk image using Disk Utility on Mac - Apple Support

I hope you have those files stored elsewhere outside of that DMG file since people tend to discover problems opening DMG files at times especially as macOS changes over the years. You need to make sure you have that data stored somewhere that can be accessed & backed up outside of a DMG file or sparsebundle, otherwise you can completely lose that data at some point and the backup of an DMG file may not save you since you the corruption of that DMG file may have occurred long ago & may your backup may no longer have that version of the DMG file which opened.

These days I would suggest creating a new APFS volume alongside your existing macOS installation to store that private data. New APFS volumes created within the same hidden Container will share the same storage pool with your macOS installation, but not require making any major & risky modifications to the drive layout so you don't need to worry about sizing the new volumes. You can even individually mount/unmount them as well as encrypt them.

If you follow the instructions in the following article, then you can even prevent those other volumes from being mounted during macOS boot and even prevent the pop-up prompt to enter the password to decrypt them at boot. You just need to change the "hfs" reference in those instructions to "apfs" for it to work with a new APFS volume (encrypted or unencrypted).

Prevent a volume from mounting at startup - Apple Community

You’re welcome, my friend. 🙂

and Happy New Year to you as well.