Spindle encoder wiring check

That's an open collector interface encoder
It should be OK but if you have differential inputs, a E6B2-CWZ1X would be better
Also 2000 PPR is too high resolution for parallel port reading at more than a few hundred RPM

What's a good PPR?

This one is 1024PPR. The E6B2-CWZ1X isn't open?
www.aliexpress.com/item/1pcs-E6B2-CWZ1X-...f76&rmStoreLevelAB=0

The maximum resolution (PPR) you can use depends on your hardware
What hardware are you using?

I use a 7i76/5i25

OK so you can pretty much use any resolution encoder

Encoders with differential (line driver) outputs like the E6B2-CWZ1X
will have better noise immunity than TTL or open collector types

Thanks for the information PCW
I ordered the 2500PPR E6B2-CWZ1X