Hi John,
Well is the Amplifier a Step/Dir drive? What type of input does it have? You didn't include any info or links?
But most likely yes. If the drive is Step/Dir then it must close the position loop. It isn't necessary to also connect the encoder back to KFlop, but if you do you will be able to have KFlop monitor the following error and also plot the performance on the Step Response Screen.
You are correct in your case the servo tuning will be made in the amplifier, but you still need to configure settings for the axis in KFlop. You need to configure the axis as a Step/Dir output, which device channel, open collector or LVTTL, the max Velocity, Acceleration, Jerk, Encoder if connected, Allowed Following Error, and such.
Regards,
TK