The problem is that when you leave the Windows partition unencrypted, then you will also have an unencrypted pagefile (where Windows stores application memory when running out of RAM) and hibernation file (where Windows dumps the RAM when hibernating). When you are working with confidential data stored on your encrypted hard drive, then their content might end up in these files.
There are also other places on the system drive where confidential data might show up (depending on what information you consider confidential, of course). One thing I would always want to be encrypted is the
C:\Users directory, because all kinds of applications use it to store temporary (and not so temporary) files. Whenever you view or edit a confidential file, the software you use for viewing might store information about that file in your user directory. When you are sure that you will only use programs to work with confidential files where you know that they won't ever do this, then this might not be a concern. But are you sure about this?
And by the way, all web browsers I know store their cookies and history there. Just saying.
If you want to minimize the amount of encrypted volumes, then I would recommend to use 3 partitions:
- The Windows system partition (encrypted, decrypted on boot)
- Confidential data (encrypted, decrypted when you need it)
- Unconfidential data (not encrypted)
But it might be more convenient in the long run to just bite the bullet and encrypt the whole disk. Just run the initial encryption process over night.