Encapsulated Stainless Steel?

I honestly don't know. My catamaran has stainless chainplates which are bolted to the fiberglass hull with thru-bolts.

The obvious answer is yes it can, but the question then is 'Do you really want to?'

Stainless steel needs a supply of Oxygen to maintain the surface oxide layer that keeps it from corroding. If you deny this supply of Oxygen and the steel comes in contact with seawater, the result will be pitting and crevice corrosion. This commonly occurs under washers where the water stagnates. In your scenario the steel would probably be ok until the glassfibre started to allow water in, which would then be trapped. Once the oxygen in the water was used up, the steel would start to corrode.

Having said that, I think that you will be better off using the Stainless Steel rather than the Mild Steel.

Drew