My microwave timer increases in 5, 10, 30, 60, ... second steps when turning the knob, so basically very similar scheme to this. Works pretty well imho.
With rotary encoders you can also do velocity sensing which could allow convenient coarse/fine adjustment, but for kitchen timer that probably isn't that useful.
What about removing the "0" label (which is implicit anyways) and having a label at 10sec instead. That would preserve the pattern that the last label is self-documenting as the increment interval.
With rotary encoders you can also do velocity sensing which could allow convenient coarse/fine adjustment, but for kitchen timer that probably isn't that useful.