How to zip directory with encryption for file names?

In a zip file, only file contents is encrypted. File metadata, including file names, is not encrypted. That's a limitation of the file format: each entry is compressed separately, and if encrypted, encrypted separately.

You can use 7-zip instead. It supports metadata encryption (-mhe=on with the Linux command line implementation).

7z a -p -mhe=on Directory.7z /path/to/directory

There are 7zip implementations for all major operating systems and most minor ones but that might require installing extra software (IIRC Windows can unzip encrypted zip files off the box these days). If requiring 7z for decryption is a problem, you can rely on zip only by first using it to pack the directory in a single file, and then encrypting that file. If you do that, turn off compression of individual files and instruct the outer zip to compress the zip file, you'll get a better compression ratio overall.

zip -0 -r /path/to/directory
zip -e -n :

You could create an archive using your favorite tool and then use bcrypt to perform encryption/decryption.

A) To create an encrypted file:

tar -czf Directory.tgz /path/to/directory
bcrypt Directory.tgz

This will give you a Blowfish-encrypted file Directory.tgz

B) To reverse this process:

bcrypt Directory.tgz.bfe
tar -xf Directory.tgz