The choice to use blowfish or GPG shouldn't be displayed for creating the default wallet. Because most users won't know what's that choice about. And I suggest to simply default to blowfish. Configuring GPG is also little more work and maybe not something every KDE user wants to do. So by default there should be simply a KWallet being created with blowfish and made accessible via pam_kwallet.
Duplicate of 333137. Though as I understand, blowfish is less secure. *** This bug has been marked as a duplicate of bug 333137 ***