Not sure what you mean by System Encryption. I assume you meant right clicking the file in Windows Explorer and selecting the encrypt option. In that case the file is encrypted on disk and tied directly to your user account.
Encryption is a feature of NTFS. Provided you stay with NTFS systems then the encryption follows with it. If you attempt to copy/move a file to a non-NTFS system then Windows is supposed to prompt you for what to do. Command line tools may behave differently. However if everything is working correctly then the files will be copied/moved decrypted to the file system as encryption isn't supported on them. So in your case, if you were using Window's encryption option, then it would have been decrypted when copied to the USB stick.
- Encryption isn't supported on non-NTFS so there would be no way to decrypt it as it isn't encrypted. Although if you really wanted to verify this you could copy the file back to the original system and then see if Windows thought it was encrypted. If it suddenly appears encrypted again (and you can read it) then it was copied decrypted but there is no known scenario that I'm aware of that this scenario would have happened.
- Again, shouldn't be possible as the file is decrypted on the fly. It is possible that the file was simply corrupted when it was copied.
- Don't use NTFS encryption :} Seriously though if you want to protect a ZIP file then use the ZIP format's encryption. It is breakable but if you layer that on top of good file system and physical security it should be good enough.
Consider opening the file in a binary editor and look at the first couple of characters. Zip files start with a well defined stamp. If that stamp is there then the file is not encrypted but could be corrupted.