I've had success wiring a mechanical CUI encoder according to their datasheet. Values are spot-on for a hardware debouncing and diagram simple to understand for me.
Nevertheless, I prefer for my application a better tactile feedback for the user, so I researched a bit, and it seems like Grayhill 62AG Series would fit perfectly.
Now, looking at their datasheet, I'm surprised how much the wiring changes from the CUI wiring. I suspect this is due to it being an optical encoder vs mechanical to the CUI (?).
Here is the datasheet extract :
What is the thing next to the two capacitors ?
What is the LED's purpose between +5V and GND ?
I actually have doubt whether this is the internal wiring of the encoder, or the recommended wiring for it...