I just discovered that Austria Microsystems (AMS), my preferred source for magnetic encoders have recently released the AS5600. It looks very promising compared to the AS5050A I have been using. It costs $1.65 (per 1000) versus $2.98 for the 5050, and has 12 bit resolution versus the 10 bit of the 5050. It also requires fewer external components, and can run at 3 or 5V levels. This means I can eliminate a voltage regulator, a level shifter, and several passives. Switching to the 5600 should reduce the BOM cost by at least a couple of dollars. It even uses I2C or Analog out, instead of SPI + interrupt line, so even fewer IO pins will be consumed. 

At any rate, I will continue developing with the 5050 for now, and later swap to this newer chip. In theory, it shouldn't be too complicated to switch from one to the other, because Moti has a modular design where the encoder is broken out on it's own board.

In fact, the flip side of the Moti encoder board was designed to the AS5161, which turned out is not appropriate for Moti. However, its SOIC-8 package, and the layout of the power pins and analog out pin are the same as the 5600, so I may be able to start working with it right away!

Hmmm, it would be pretty awesome if I can use just an A2D pin to capture position, because then the encoder board could perhaps be swapped for a pot if the user wanted to try Moti circuits in regular servo motors.