The deniability aspect is irrelevant. This is a method of authentication, not encryption. For the authentication to work, the system must know the password and

The deniability aspect is irrelevant. This is a method of authentication, not encryption. For the authentication to work, the system must know the password and present it to you, along with two other non-password foils. Then to access the system you must demonstrably show that you "score higher" on the trained sequence. I'm not sure how one would apply this method to encryption.