When I tried to enable FileVault on a new machine today, I got a message I didn’t like: A recovery key has been set by your company, school, or institution.
Turns out, it was a leftover from many laptop migrations ago. The clue was in an Apple support forum post.
I deleted the following two files, dated 2007, then rebooted, and the problem was gone:
/Library/Keychains/FileVaultMaster.cer
/Library/Keychains/FileVaultMaster.keychain
Note that this is very unlikely to work on a machine that actually does have an institutional recovery key set, but it works great when you have migration-cruft messing things up.