Iteration #2, putting encoder B output through the Schmitt trigger before applying it to the circuit would be a better practice: Please view in a fixed-width font such as Courier.
. . VCC . +------+-----------------------+----------- . | | | 74HC132:C . | | | __ . [10K] [10K] | VCC-| \ _ . | | | | >o-> B . +------|-----------------------|-----|__/ . | | | . | | .---+ . | | 7.5ms debounce | | 555 . | | ---------- . | | | RST VCC | . | | | | ____ . | +-[68K]---+---+-|THR Q|-------> A_DB . | | | | | | . o o | '-|TRIG | . \ B \ A === | | . o o 0.1U | | GND | . | | | ---------- . | | | | . '------+---------+-----------+-------------- . GND . . . sample pulse generator . 74HC86:B . ____ ___ . A_DB >----+------------------------------\\ \ . | ___ 74HC132:A || >-> A_TRANS . -\\ \ __ .--//__/ . || >-[10K]----+--| \ | . VCC>---//__/ | | >o-' . +--|__/ 150us nom . 74HC86:A | . 0.1U === ________ . | __| |__ . GND . . . . delay 1.5us nom . . A_TRANS>----[10K]--+---. output clock steering . | | . 0.001U=== | . | | . GND | . ____ ___ | 74HC132:B . A_DB >--\\ \ | __ . _ || >---+----|-----------| \ __ __ . B >--//__/ | | | >o-> CW |________| . | +-----------|__/ . 74HC86:C | | . | | . | | . | | . | | 74HC86:D . | | ___ 74HC132:D . '----|-----\\ \ __ . | || >-| \ __ __ . | VCC-//__/ | >o-> CCW |________| . '------------|__/ . . . . Both transitions of A are used to sense B, B is unstable at detents . . . Panasonic EVQ-WTE encoder