Thank you all for the links!
You are right, we are getting somewhere. Now that I think about it, there actually isn't anything weird about my hardware. I was just so hyper focused on my past attempts that I did not think it is plausible that any ready made hardware would work well for me.
Time for some specs:
I am using BTS7960 DC motor drivers like shown here:
www.amazon.com/HiLetgo-BTS7960-Driver-Ar...urrent/dp/B00WSN98DC
. 43A and I got them for around 8€ each. IIRC there are 2 direction pins and 2 PWM pins, but I chained them together to have one pin for right direction, one pin for left direction, and one common PWM pin. All 5V. Additionally there is a Current-Sense pin but I did not use them.
On the other hand, I have the encoders, they consist of IR leds and sensors, and a very simple PCB that rectifies the signals to be a sharp 5V quadrature signal. So yes, quadrature. Reference mark is yet to come.
In the past, I did not find any boards that are good in decoding quadrature inputs and that are still cheap and not part of a massive system, so I was trying to read the quadrature signals with the Arduinos directly. The Interrupts were too slow, so I used the Arduino MKR Vidor 4000 which has an FPGA as well as an MCU, and used the FPGA to decode the quadrature signals, and to do the PID loop at a very high frequency.
That being said, yes, if there was a LinuxCNC compatible board that takes in 5V quadrature signals and puts out PWM and direction signals for the BTS7960, I would spend money on it. It would still allow me to experiment with my own encoders and the concept of reference marks, and so on... Open to board suggestions, thank you