On the NI FIRST community, Joe Hershberger said the limit is 39,987 counts per second.
https://decibel.ni.com/content/message/12523 All of this is handled by the FPGA, so there is no additional processor load as you increase the count rate.
Joe made one important caveat, that there is a perfect 90 degree phase relationship between the signals from the encoder. This isn't true with a real world encoder. I would leave 50-100% margin and only use a range of 30-20k counts per second.