Encrypted in transit yes, but only between the VPN endpoints. Anything already inside the network (compromised host, rogue container, bad route) sees your queries in cleartext. TLS on the connection itself gives you end-to-end encryption between your app and Postgres, no matter what's going on in the network in between. Same reason people moved to HTTPS everywhere instead of just trusting the corporate firewall. And with connection pooling you pay the TLS handshake once and reuse it, so the overhead is basically nothing.
Maybe we're talking about different things. If there's a VPN link between the two severs there shouldn't be any "network in between"
Fair point, if it's a true point-to-point VPN between just the two boxes, there's not much "in between" to worry about. TLS on top is mostly defense in depth at that point. What I had in mind was the more common setup where your app and DB sit on a shared network (VPC, corporate LAN). The traffic between them is unencrypted, and you're trusting every piece of infrastructure in that path (switches, hypervisors, sidecar containers) to not be compromised.