I see two things wrong in your description of the encoder operation, the output only goes to 2.5V and the readings are different when you change direction.
Here is a video testing the same part number encoder.
https://www.youtube.com/watch?v=NvHlbB1eWSsLook for two things as you watch. When the model number is shown the 2nd line is a different format than yours. video=NO D20180915 your photo=NO:YCJ 2021.04.02. Does the difference mean it's counterfeit or did they change the numbering scheme? Possibly it means it has different options.
About a minute in when the dial is being turned you can see when it stops the mechanical detent holds it exactly on an index mark.
The 2.5V reading instead of the 5V I expect could be you're turning too fast. If you stop on the detent and slowly advance one click at a time you should see either 0V or 5V.
The output pattern of a quadrature encoder is
A B
0V 0V
5V 0V
5V 5V
0V 5V
etc.
Note the state of either output changes every 2 clicks.
The C10 boards inputs are CMOS. They expect an ON signal to be above 3.3V and an OFF signal to be below 1.6. The actual threshold where it decides whether an input is On or OFF is somewhere in between. If the IC on your board has a threshold a bit below 2.5V, and your measurement is correct the input would work - barely.
To summarize, either the output voltage of your encoder is too low or it's not a quadrature encoder.
Craig's suggestion to buy from a known good vendor may be the best solution.
John