This is a super-overkill rotary encoder. Not only does it encode in a rotary fashion, it also lights up! It includes a ring of 20 ultra bright and even more ultra tiny Neopixel LEDs.
I originally designed this to control digital effects in a guitar. Because the knob would potentially be mapped to several different controls, depending on the active effect, an ordinary potentiometer wouldn’t cut it. What if, for example, in one mode it was set to 50%, and in another it was set to 100%? Enter the LED ring. Now, whenever it changes modes, the indicator can reflect the correct value.