jtsylve, except for one pullup resistor, somewhere, all of the rest of the circuit is an attempt to defeat switch bounce. I think your circuit actually would work pretty well when the switch goes from open to closed, and as the rotating contact is dragged against the conducting surface connected to ground as the knob is turned. Since the capacitor discharges immediately when the switch is closed, but only charges slowly if the contact is temporarily broken, you are less likely to have the line actually go high during bouncing.
But at the other transition things aren't so good. When the switch goes from closed to open, even the slightest contact will result in an immediate low. Bounce is less likely to occur in the first place at this transition because the rotating contact is being dragged onto a non-conducting surface, so it can bounce all it wants to physically without causing any electronic bounce. But there can still be some flutter as the rotating contact leaves the conducting surface.
But typically designers try to choose similar delays at both transitions, which is why everyone wants you to include some series resistance when the rotary switch is closed.
Not to complicate your life, but I think increasingly the modern practice is not to include any hardware debouncing (no capacitors), but rather depend on software to defeat any bouncing that occurs. This approach saves on the BOM and on board space, and the software routines have actually become quite good at dealing with bounce. I don't think you've said how you're reading the encoder state, whether you are polling at regular intervals or letting the encoder lines generate interrupts, but both methods can work quite well with no hardware debouncing. One approach to this is discussed in my Github repository on this subject.
https://github.com/gbhug5a/Rotary-Encoder-Servicing-RoutinesAs far as power consumption is concerned, if you are using the internal pullup resistors, remember that you can turn them on just before you read the pins, and turn them off immediately after, so you would use almost zero power. Of course that's for polling only. For pin interrupts, they would have to be enabled all the time. Either way, I think you really do need to get one of the open-at-all-detents encoders, like the PEC11's, and make sure
pulses equals detents.