I have replied on the discord
@nonosto with a picture I drew.
The setup in the picture you sent won’t work at all - where did you find that? The sense line red wire MUST be also connected to GPIO 12 which is Pin 32 (by default) on the raspberry pi uninhibited by the diodes.
Basically it’s as simple as this:
Connect green wire to A
Connect white wire to B
Connect black wire to GND
Connect Red wire to Pin 32 on Pi
Connect Pin 32 to GND via a 1kOhm resistor or 4 signal diodes (make sure diodes are correct way around if used).
If anyone can suggest a better way of explaining please do!