What you have purchased, according to your link, is a rotary switch not a rotary encoder.
A rotary encoder only puts out two signals, one when turned clockwise and a different signal when turned anti-clockwise. They have no limit on the revolutions it can turn in both directions.
They are used for brake bias, volume control etc.
Basically if you want to control something that has two inputs, left - right, increase - decrease, front - rear.
A rotary switch is used for switching between different functions.
They generally have 12 switch positions but with the use of a supplied stopper you can limit the amount of positions it can be rotated.
You could use a rotary switch for selecting the different HUD LCD screens in rFactor or the black boxes in iRacing etc.
As for wiring that rotary switch to the BBI-32, there would be one ground contact, in the centre of the switch, that would go to a ground contact of the BBI-32.
Then depending on how many switch functions you want, one wire from each switch terminal goes to a numbered terminal on the BBI-32.
Leo Bodnar has his own rotary switches that only require 2 wires for the 12 switches instead of 13 wires for your rotary switch.
