@Juraj
Yes, that is what it is. I've worked with the same buffering systems before(mostly with serial and i2c), just did not know the term for them.
Hey awesome job on the enc library, I really appreciate your hard work. It has some nice features in it, but yes same problem. Its a hardware issue(limitation). In most cases FIFO makes sense, but in my case, the arduino is far to slow to keep up and missing a lot of important packets that come first