I have no idea what "multiplexing QEI signals" exactly means for your application?
Obviously, a single QEI interface can only track the position of one axis. If you want to reuse it for multiple encoders, the position has to be saved and restored each to time you switch the channel. Also quite clearly, none of the unconnected encoder positions is allowed to move in the meantime. This can be a problem even if it's known undriven, because the QE output might dangle back and forth with minimal movement.