Place the rotary encoder on the top side of the PCB before installing the plate and switches. It should click into place and might require a firm press. Look at the encoder from the side to see if it's seated correctly, then solder the five pins of the encoder.
If you're using Mill Max Hot Swap Sockets for your switches, it's wise to solder those first, since the PCB will be easier to work with. To learn how, read the article How do I install Mill Max Hot Swap Sockets?
If you'd like it to be extra rigid, you can choose to solder the side legs in place too, but it's not required.
You can choose to install up to one encoder per half in any of the three possible spots. You can install an encoder on the spots marked ENC1 on the top of the outer column, ENC2 on the bottom of the outer column, and ENC3 on the innermost thumb cluster spot.