If both the connecting devices are cisco then mismatch frame relay encapsulation can work but if remote device is non cisco the cisco device has to configure with ietf FR encapsulation because non cisco device does not understand cisco.
The reference text:
The main reason why one will use the 'IETF' encapulation is because the
third party vendor do not understand Cisco's 'CISCO' encapsulation so they
would not be able to decapsulate packets sent to them with 'CISCO'
encapsulation.
Cisco went a mile further and as such Cisco routers understands both 'IETF'
and 'CISCO' encapsulations. When this near-end router uses 'CISCO'
encapsulation, it merely means that at layer 2, it is going to encapsulate
all out going packets with "CISCO encapsulating Language engine" incoming
packets can be decapsulated even if they are coming as 'CISCO' or 'IETF' .
The same logic applies when the far end router have 'IETF' as its
'encapsulating language'
In essence, 'frame-relay encapsulation CISCO' or 'frame-relay encapsulation
IETF' only applies to how this router will encapsulate its outgoing packets
and not decapsulating incoming packets. Since third party routers do not
have the Cisco's proprietary 'CISCO encapsulation engine' in their products,
hence one have to use 'IETF' encapsulation when talking to them.
