I want to hear more about what you expect the rotary encoder to be used for. You clearly put a lot of thought into making it happen, so - why? I feel like there must be some interesting use cases, but I'm drawing a blank.
Anything that benefits from fine tuned 'back and forth' adjustments that settle on a value in a range.
It's often more satisfying to have 'one motion' control of these functions rather than repeated 'up down' clicks to achieve a desired range.
With a rotary, you can choose the velocity of the adjustment which you cannot do with discrete 'up and down' clicks other than through a 'hold' algorithm or rapid clicking.
It looks like the kind of thing that might get damaged. Imagine it getting stuck when opening a drawer, which someone unwittingly tries to overcome with force.
As an aside, if that sounds interesting, you can do this with some of the cheap USB volume knobs available from Amazon, etc. that have a configuration menu, e.g. https://hackaday.com/2022/01/20/setup-menu-uses-text-editor-...
Switch out that selector switch for a knob with an indent. Its just annoying and bad feeling to free spin a selector switch like that. For stuff like scrolling and volume adjust, you want to be able to do it effortlessly with one finger.