would something like this work with a zero delay encoder
Yes, it will work just like any 8-way (microswitch) joystick and two push buttons.
You linked to the short shaft version with only 3/8" clearance between the mount plate and the bottom of the stick.
- On a wood panel, you'll need to top mount it.
- With the dust washer installed, there is only room for about 1/8"/3mm plexi or a 3d printed cover for the mounting plate. (LMK if you want the OpenSCAD code for a cover)
Some vendors like
Ultimarc sell a longer shaft version.
would it make your hand cramp up?
Depends on the player, the game, CP layout, etc.
Scott