Why did you add mode="encode" to the delegates.xml line?
I don't know how IM decides a NEF file should be treated as a DNG file. If you want to add your own entries to delegates.xml, I suggest you use a different decode name such as "mynef", then prefix your files with that name. For example, in delegates.xml:
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<delegate decode="mynef" stealth="True" command="dcraw.exe -e -6 -W -w -O "%o" "%i""/>
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magick mynef:abc.nef out.tiff