The Adafruit board has neopixels under each encoder and would shine the light up the stem but I couldn't find where I could order rotary encoders with click and clear stem. Instead I'm using ones with RGB LEDs in the encoder will strobe through the 4 encoders to control the RGB LEDs and read the push-button inputs with a limited number of pins.

In searching for parts I found some related designs

• Pimoroni also has an i2c encoder breakout with RGB. Their encoder only has the rotation pins, no LED or click pins so I guess they found a clear shaft one. https://shop.pimoroni.com/products/rgb-encoder-breakout?variant=32236590399571
• Sparkfun also has i2c encoder breakout with RGB: https://www.sparkfun.com/products/15083 and they sell the encoder they use individually: https://www.sparkfun.com/products/15141 . This encoder has 5 pins on one side for the shared-anode RGB LEDs and push-to-click switch.

The encoder I found on digikey, the Bourns PEL12T matches the Sparkfun one with 5 pins on one side, 3 on the other.

I hope cycling between lighting up the 4 encoders will work well enough.