Welcome aboard, Cush.
There are two possible causes for what you describe -- hardware and software.
Since it does the same thing on your laptop as on your main system, it's probably not software.
If you go into Control Panel-Gamepad and bring up the calibration window for your gamepad, does it stop showing your button/joystick presses after about the same amount of gameplay action that it fails normally?
The most likely culprit is that one or more wires and/or poor solder joints are shifting and losing contact during gameplay.
Given the low current flow of encoders, the very distant second possibiility is that you might have a thermal problem caused by a high resistance solder joint.
The high resistance joint would allow current to flow at first, causing the joint to heat up.
As the metal in the joint heats up it expands slightly which can cause it to lose contact until it cools, contracts, and makes contact again.
If redoing the solder joints so you have solid electrical and mechanical connection doesn't fix the problem, consider posting some close-up pics of the solder joints.
Scott