The docs don't mention the Teensy 4.0 because at the time of writing them, there was no MIDI over USB support yet for the 4.0. Since then, I've tried some simple MIDI over USB code using the Teensyduino Beta Core, and it seemed to work fine. I haven't had time to test out anything fancy like displays on the 4.0.
The library should be compatible with the 4.0, but I haven't added it to my Continuous Integration tests, so I'll check again tonight or tomorrow.
The advantage of encoders is that they don't have an absolute position. If you change a setting in your audio software using your mouse, and then move the encoder, it will move relative to the value you set using your mouse. If you do the same with a potentiometer, it'll jump back to the absolute position of the pot, ignoring the change you made with your mouse.
Similarly, a single encoder can easily be used to control multiple settings, while this is harder to do with a pots, because the value will always jump back to the physical position of the pot when you move it.
The disadvantage of encoders is that they require relatively tight timing. If the controller is busy writing data to a display for a couple of milliseconds, you might miss some encoder ticks in the meantime, resulting in the encoder value jumping around like crazy.
The solution is to use interrupts, but not all boards have enough interrupt-capable pins for 10 encoders.
Recently, a user on GitHub let me know that he successfully used 16 encoders on a Teensy 3.5: https://github.com/tttapa/Control-Surface/issues/131#issuecomment-597127984
What kind of displays did you have in mind?
The problem with displays is that they are slow and memory hungry, but this shouldn't be an issue on most Teensies, as long as you keep the number of pixels and the number of colors low. Using multiple B&W SSD1306 displays on a Teensy should work without any problems.
Text-only displays are even less of an issue, since you don't need a display buffer, and sending over a couple of characters takes much less bandwidth than updating thousands of pixels.
You can't really go wrong with Teensy 3.x or 4.0 boards, but the 4.0 might not have enough pins for 10 encoders. Potentiometers and buttons can easily be connected using multiplexers, but this is not possible for encoders (well, it's probably possible using some platform-specific tricks, you could use timer interrupts to poll the encoders, for example, but the library doesn't support it out of the box).
Pieter