I think that these and similar ASSD drivers (my choice) can work with the factory settings only with their own encoder, if you disconnect it, an error will appear in driver state. In the case of the 7i77, which requires an encoder, you should probably have another encoder connected to the axis so that the 7i77 gives analog output.. seems quite confusing, with some step/dir card like 7i96s I think it would be much simpler.
You don't disconnect the encoder from the drive, you connect the drive's encoder out signals (on CN1) to the Mesa card. But yes, step/dir control can be simpler connection-wise (one less cable per drive) if you don't want/need feedback of actual position to LinuxCNC.
(You *can* also use a fully closed position loop where you have, say, a linear encoder on the machine that feedbacks position to LinuxCNC, while the drive controls velocity using the motor encoder. IMO in most cases it's probably both easier and better to use high precision, preloaded, linear components instead though.)
