As I am still in mock up testing...
I thought why not just try... worst case it fails and I have to get a new encoder.
So I have taken out the good old soldering iron and moved the J1 jumper from next to R2 as it came delivered and moved it next to R1 Using same middle contact.
Now when plugging into the USB it boots up with the Green light "on" being in digital mode, the mode switch if desired still lets me change state.
I made a video comparing the encoders one left as delivered starting analogue with red led, and one modified by relocating the jumper (before modifying the 2nd one).