On the suggestion of a commenter:
Yes, They Did, But.
The question as asked in the title is "did a participant in the vaccine trial develop acute encephalopathy?" In the original posted article, there was a link to a sciencemag article that stated it fairly definitively:
The trial participant, a 40-year-old business consultant from Chennai, sent SII a legal notice on 21 November claiming he developed a severe neurological condition on 11 October, 10 days after receiving his first vaccine dose. He spent 15 days in hospital, including 8 days in intensive care, suffering from acute neuro-encephalopathy that left him “totally disoriented,” according to the complaint, so much so that he could no longer recognize close relatives. He is doing much better now but still has not fully recovered, his wife has told reporters.
...[T]he trial’s principal investigator, S. R. Ramakrishnan of the Sri Ramachandra Institute of Higher Education and Research has acknowledged in interviews that the subject fell seriously ill, and that he did receive the study vaccine, not a placebo.
Based on a radiological examination of his brain, Ramakrishnan determined his illness was not a result of the vaccination, he reportedly told The Straits Times. A local ethics committee agreed with that assessment, Ramakrishnan said.
Also, from separate reporting (emphasis mine):
"The causal link is objectively assessed at three levels – by the IEC and the DSMB and the DCGI. If someone isn’t satisfied with the assessments of all three regulators, a medico-legal process is the only way to go. These complexities are also explained in the consent form, where it is also clarified that the IEC, DSMB and DCGI will determine the outcomes of any outliers," explains Dr Samiran Panda, Director of the Indian Council of Medical Research (ICMR)-National AIDS Research Institute (NARI) — the organisation tasked with conducting the WHO Solidarity Trial in India. "The DCGI ultimately decides whether to attribute a side effect to the investigational product, or refute it. In this particular case, the causal link was not found and established," Dr Panda added.
So, a participant who received the vaccine developed an encephalopathy. The preliminary conclusion of multiple agents working in a supervisory capacity over the vaccine trial was that the vaccine was not the cause of the injury. Due to the impossibility of definitively proving a negative, and (from the second article) what sounds like systemic transparency issues with the entire development processes, legal proceedings have begun, with suits and countersuits, muddying the waters a bit.
Editorial note: This is akin to the perennial "vaccines cause autism" debate. Proving that no vaccine has ever triggered autism in any recipient is effectively impossible, because individual biochemistries can always have unexpected interactions. The same is true here. So aside from the legal embroilments, one cannot state definitively that the vaccine didn't cause the encephalopathy. Moreover, even if an alternative cause is found, one cannot rule out the possibility that the vaccine aided or exacerbated it.
However, with multiple reportedly independent assessments suggesting that they see no causal link, it is probable that the injury is independent of the patient's participation in the vaccine trial.