I admit I didn't learn Japanese formally and my knowledge of the language comes entirely from Internet research, so feel free to correct me on anything I say here.

I was taking a look at how various words and titles in Touhou Project were translated into other languages; more exactly, into languages that don't use kanji (or hànzì, to be more correct) in any capacity. The character 魔 [ma] shows up quite frequently in Touhou, sometimes in its meaning of "evil" or "demon"/"devil" and more often in its meaning of "magic" or "mystic", depending on the context in which 魔 is used. Two names in Touhou that include 魔 are 東方封魔録 [tou-hou-fuu-ma-roku], the Japanese title of Touhou 2: the Story of Eastern Wonderland, and 夢符「封魔陣」 [mu-fu fuu-ma-jin], one of the Spell Cards most frequently used by Reimu Hakurei within the Windows era ever since it was used as the Bomb for the Reimu-B mode in Touhou 6.

In the English version of Touhou Wiki, 封魔録 and 封魔陣 are translated respectively as "Demon-Sealing Record" and "Evil-Sealing Circle". 封 [fuu] means "seal"; 録 [roku] means "record"/"chronicle", with the latter variation of its meaning being used for 東方風神録 [tou-hou-fuu-jin-roku], the Japanese name of Touhou 10, translated as "Wind God Chronicles"; 陣 [jin] is translated here as "circle" but it's usually translated as "battle formation", which I think would be just as fitting as "circle", given how the 封魔陣 Spell Card works and looks in the boss fight against Reimu in Touhou 8.

However, the 魔 in both names is the penultimate character, right before 録 and 陣. That would normally be interpreted this way:

録 and 陣 are modified by 魔 directly. This results in 魔録 [ma-roku] and 魔陣 [ma-jin] with the meanings of "mystic record/chronicle" and "mystic circle/formation" (I didn't translate 魔 as "magic" here because that translation of 魔 should probably be reserved for Marisa Kirisame and the techniques she uses as a magician/witch, whereas the translation of 魔 as "mystic" feels more fitting for Reimu and her role as a Shintou shrine maiden)

魔録 and 魔陣 are modified by 封. So, we get 封魔録 and 封魔陣, with the meanings of "sealing mystic record" (or "mystic chronicle of the seal" if you feel like getting fancy) and "sealing mystic circle/formation".

When I read the name "Evil-Sealing Circle" for the first time in English, I expected the original Japanese version to be something like 魔封陣 [ma-fuu-jin] with 魔 being placed before 封, which would be read like this:

封 is modified by 魔 directly. This results in 魔封 [ma-fuu], with the meaning of "evil-sealing".

陣 is modified by 魔封, thus resulting in 魔封陣 meaning "evil-sealing circle/formation".

It'd be like the Evil Containment Wave in Dragon Ball: it's written 魔封波 [ma-fuu-ba], with the 波 kanji (spelt "ha" in isolation) meaning "wave", and its official English translation is close enough to the literal translation "demon-sealing wave".

When I take a look at Reimu's Spell Cards in Touhou 7.5 and 8, I found out that other Spell Cards whose English names are structured similarly to "Evil-Sealing Circle" were already written in Japanese that way. Just to give one example that shows up in both games, 八方鬼縛陣 [ha-ppou-ki-baku-jin] –the Spell Card used in Touhou 8 to replace the 封魔陣 for the Hard & Lunatic difficulties– is translated as "Omni-Directional Oni-Binding Circle", and when I compare the English and Japanese names, I can see the reasoning for that:

縛 [baku, "to bind"] is modified by 鬼 [ki, "oni"] directly, thus forming 鬼縛 [ki-baku, "oni-binding"]

陣 is modified by 鬼縛, thus forming 鬼縛陣 [ki-baku-jin, "oni-binding-circle/formation"].

方 [hou, "direction"] is directly modified by 八 [ha-, "eight" but also "many" or "multi-" and, in this context, "all" or "omni-"], thus forming 八方 [ha-ppou, "onmi-directional"].

鬼縛陣 is modified by 八方, thus forming 八方鬼縛陣 [ha-ppou-ki-baku-jin, "omni-directional oni-binding circle/formation"].

I guess 封魔陣 is translated as "Evil-Sealing Circle" merely out of habit, then this was extrapolated to 封魔録, translated as "Demon-Sealing Record" when the PC-98 games became more widely known in the Western fandom. I'm not sure of how this could have started in the first place, though.