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This option does not always perform as expected. For instance if I have a class with no fields to encapsulate and click on a parameters for a method the encspsulate is then activated. If there are fields to encapsulate the option does not always come up. If you have encapsulated fields it still gives the option of encapsulating them but does nothing else. If it isn't going to do anything then it should not give you the options.
This seems to me like issue for refactoring module. Reassign back if you disagree.
*** This issue has been marked as a duplicate of 52128 ***