The instructions do not have this encapsulation step. They have you go ahead and lay the fiberglass and wet it out over the bare wood. My experience building my Glen-L Zip Runabout www.vupilot.blogspot.com is that the bare wood soaks up a lot of epoxy and makes it more difficult judge how much epoxy to use to wet out the fiberglass without over-doing it.
By encapsulating the kayak now the wood will soak up the fiberglass wet-out more uniformly during the fiberglassing process. To prep for fiberglass I just need to sand the encapsulation coat until it has no shine. Then it will be ready to glass. Plus, this gives you a preview of what it will look like when finished and gives you the chance to fix any trouble spots that appear before they are forever entombed in fiberglass.