I also installed one of these famous 100ppr ebay encoders.
The speed of the Nano is a restraint for sure, but in my case it was totally sufficient.
The probem I faced was the programming of the encoder function. It was written for the low-resolution mechanical encoders,
not for the faster optical ones. I just replaced two commands ("millis" to "micros") in the KD8CEC's source code and my encoder worked.
/g/BITX20/message/71360