I've seen 2 babies with encephaloceles, and both did amazingly well.
The first was one of a set of triplets was born at about 30 weeks, making surgery even more difficult due to his small size. But he recovered well, being discharged home on full po feedings. He continued to receive PT after DC due to some muscle tone issues, but seemed to be pretty well on target with his "normal" brothers.
The second baby delivered at our Level II hospital, despite our objections, because the mother's insurance would not cover delivery at a tertiary care center. Prior arrangements had been made for the transport team to be "on call", but we believed the baby's defect to be quite large, so we weren't sure prior to delivery whether a repair would be attempted, or whether the parents would choose comfort measures only.
The defect was quite large, but the baby was immediately pink and vigorous at birth. In fact, our greatest fear was that she would somehow get her hands on the exposed tissue, injuring it. The transport team was slow in arriving, so we had the defect covered, an IV started, antibiotics going, and took the baby out to mom in recovery to wait for the transport team. She remained pink and vigorous, trying to suck. Apparently, her surgery went very well, and she was DC home in a few weeks. The parents brought her up to visit once, at a couple of months of age, and she seemed to be perfectly normal developmentally.
It amazed me in both cases, how well the babies did, at least initially. I would be curious to learn of their long-term developmental status.