Yes and no.
In August 2008 we rode that route. We crossed in from Kazahkstan through Karkara then turned down toward Engilchek (on the A364 according to Google Maps). Everything was fine and it was a good ride all the way through to Engilchek. But when we arrived at the town we were stopped at a military check point and not allowed any further.
We needed a border zone permit from Karakol. They were friendly and helpful and rang all sorts of superiors, but simply couldn't let us through without that paperwork.
So riding to Engilchek is fine, but if going further (up towards the glacier) then you need to sort out some paperwork in Karakol.
Vladivostok - Denmark 2008... Finished.
Denmark - South Africa 2010-2011... Finished.