The device can be removed with some careful work; the main problem is pulling the pads off the PCB that lead to the pads on the rear of the encoder. My advice is to solder-wick these pads, then the through-hole mounting under the centre of the wheel, then carefully heat and lift the two side legs.

When all that's done, you can gently hinge the encoder on the rear pads, apply a little heat to release them one at a time. Clean up the pads and finally fit the new encoder.

On a Karma, there's very little space between the nearest 0402 components and the back of the encoder - I'd take a good macro photo of the area just in case you manage to accidentally desolder one of them!

Hugo