How about a mini-teardown?
So needy.
You'll have to live with my phone camera.
Three small Phillips screws hold the outer case on, the cable just pushes through a rubber grommet.
The cable has a cable tie to prevent it from pulling through the case, hot-melt glue is used to protect the cable joints and the board is screwed onto the face place with some brass spacers. The shaft looks to have two separate ball bearings but the (Plastic ?) disk has a slight wobble so the encoder may not be perfectly linear.
The board is single-sided, apart from the optical sensor which is mounted on the back. There's a 7805 regulator (Glued down) on the board and the soldering looks to be of decent quality. There looks to be a diode at the top by the shield wire, but it's covered in glue.
Just had a quick buzz around with my multimeter and have worked out the main part of the circuit.
The shield is connected to the metal case, the ground is not. The input power wire gets regulated through the 7805.
The output of the optical sensor looks to be open collector - It has a 4.7k pull-up resistor to +5v and then a 1k resistor to the base of the transistor. The transistor pulls the output down to ground through a 20 Ohm resistor. There's an up-populated resistor pad for each output for an optional pull-up resistor - This would pull the output of the transistor up to the input rail, not the regulated 5v rail.