Any station can elect to encode, including rimshot stations that are not technically licensed to the Metro Survey Area. If the station wants to be seen by agencies and, of course, subscribers (as long as it meets minimum reporting standards) it can encode. Subscribing is not required to encode.
The fact that the station has a translator in the market is an interesting issue. Here is a rimshot from outside the MSA with a translator in the market. I believe that Nielsen would consider it an "in market" station, but am not sure.