You are correct in that SSL/TLS does provide encryption of the data. However, one thing to keep in mind with FTPS is that there are actually two TCP connections involved: the control connection (e.g. to port 21) over which FTP commands are sent and responses received, and the data connection, over which requested data such as directory listings and file uploads/downloads are transferred.
PROT FTP command is for configuring the protection for those data transfers; see RFC 4217, Section 9 for the specification/details. The control connection will have its SSL/TLS session, and thus be encrypted (and protecting your
PASS values). But should the data connection also use SSL/TLS? Some use cases may say yes, some may say no. Most sites wishing to use the full benefits of SSL/TLS for data private and confidentiality will want to use
PROT P for encrypting the data connection, in addition to the protection on the control connection. Sites that don't want this may allow FTPS clients to send
PROT C, to request that data transfers not be encrypted. (And some FTPS servers also allow the
CCC command, which can be used to remove the SSL/TLS encryption from the control connection.)
Hope this helps!