I believe the answer can be found here, under the 'Process Memory Protection' section.
The first part:
While KeePass is running, sensitive data (like the hash of the master key and entry passwords) is stored encryptedly in process memory.
This describes the data that is stored in RAM that is encrypted, which it can do, as this data is never displayed in it's raw form to the user.
And the second part relating to your actual passwords and usernames:
Additionally, KeePass erases all security-critical memory when it's not needed anymore, i.e. it overwrites these memory areas before releasing them (this applies to all security-critical memory, not only the password fields).
This describes that your passwords are not actually encrypted whist in RAM, but are erased and the memory freed as soon as they are no longer required.
It is a little confusing that they say 'In memory protection', because as this documentation proves, this doesn't necessarily mean 'encrypted'.