HI
The PDF file is the program for the encoder. I wonder if somebody can tell the logic behind the bits B10:0/5 and 06 on page 3. thanks

The intent of the writer of the logic is in the comment for that rung. The comment appears near the bottom of page 2.

This is probably just a demo in ladder of how quadrature detection (in this case X4) is performed. It would be slow implementing it in ladder logic.

I would have made the output coil of the second rung an OTE, used a separate bit (B11:0/9 ?) as an OTE of the third rung then tossed out the 4 parallel contacts at the beginning of rung 4 and used the two bits (B11:0/8 and B11:0/9) as clocks into the Up/Down counter. This construct looks a little awkward.

I would use the presence of limits to stop motion but not stop counting (unless it was about to overflow). Even in a limit condition I would like to know where something is if possible.