To answer this question, let's start by asking what problem the rar software is trying to solve by offering this feature.
If anytime I open a rar it caches its content, then is the whole encryption pointless? That way, even if you are using programs that do the little things wrong, it doesn't matter. Also, turn on your firewall to make sure that programs aren't uploading data anywhere without your permission. TL DR: the single best way to protect yourself from data leakage on a personal computer is to use full-disk encryption (or encrypt your user's folder if it's a shared computer), a strong password for your user account, don't share your account with anyone, and make sure you log out (or at least lock your screen) whenever you step away from the computer. In your case, your rar program makes a local cache of the contents, presumably so it'll run faster - something that most users would be happy about. While I applaud your attempts to use commonly available programs to increase your security, software that wasn't expressly designed for security often does the little things wrong (as you found out).
