As I said on the BGG forums, there is a flaw in this response. The Innsmouth Jail text reads:
Each investigator in the Jail Cell during the Arkham Encounters Phase makes a Sneak (–1) check and draws encounter card...
It is clear that the investigator has no such option; in fact, having a non-jailbreak encounter might result in a nonsense encounter such as walking out of jail.
Still, it answered the question we asked, so there's that.
Edited by Tibs, 09 September 2013 - 09:02 PM.