Traditionally JRiver has provided an upgrade path for licensed Media Jukebox 8 users (and still does). The next version after MJ8 was renamed to Media Center 9. Since then the MC10, 11 and 12 versions have been released. JRiver offers the upgrade to the latest MC version at a reduced price. Currently it is about $20 (19.99 or so, I think).
MJ12 was released as a stripped-down audio only version of MC12. MJ12 is free except that obviously JRiver cannot officially provide the MP3 encoding part for free. I assume this is because of the patented technology (even thought the LAME encoder's source code itself is freely available, a compiled encoder that can produce MP3 files is not free from patent restrictions). The price of the MP3 encoding license is $9.95.
You can still use the external encoder option for free if you have purchased or acquired an MP3 encoder from some other source. It works with many different command line MP3 encoders that are in the exe format like Fraunhofer, Helix, Xing, LAME etc, but it isn't as convenient as the built-in MP3 encoding option.
Even though MJ12 was not primarily designed to be an upgrade for MJ8 (MC9 and the later MC versions upgrade all MJ8 features), I think that since the old code in MJ8 has started to be somewhat incompatible with latest Windows components and newer hardware JRiver decided to offer MJ12 as a free upgrade to MJ8 users.
Most likely the situation you are facing is unintentional. The issue is just a mishap that is related to a new program and its published details. There would be no problem if JRiver had clearly explained the MP3 encoding policy and the price.
$9.95 is not a lot of money. However, I would advice to try MC12 and consider the $20 upgrade path. As far as I know, the MP3 encoder license for MJ12 is a separate product that cannot be upgraded to MC12.
EDIT
There wasn't an MJ v.11. The MP3 encoding license system wasn't always working before the recent MJ12 builds.