Hi EvanR,
Measured Velocity is normally noisy due to quantization error of the encoder. KFLOP samples the encoder every 90us and computes the velocity based on dx/dt where dx is the encoder change and dt is 90us. So the resolution of measurement is 1/90us = 11,111 counts/sec. However your noise seems to be ~ +/-40,000 counts/sec which would correspond to a few encoder counts of noise not just 1 count of quantization. Let me guess that you are using the CUI/AMT capacitive encoders instead of a true optical encoder?
Saving and attaching the raw data would allow us to zoom in and see things more clearly.