Torture isn't conducted to improve the ability of the victim to recall information but as a negotiating tactic. I'll give you what you want: to stop being tortured, if you tell me what I want to know.
When the intelligence community let it be known that Khalid Sheikh Muhammad confessed to planning 9-11, the response from the public was tempered by the almost universal recognition that he had been waterboarded hundreds of times before he "confessed".
At that point, he would have confessed to killing JFK and Lincoln just to stop them from slow-motion drowning him.
The torturer, of course, knows about plausible deniability. And of course, technically, plausible deniability is not limited to two levels (outer and inner volume), but can be performed on an arbitrary number of levels. From the torturer perspective, he has to continue to torture forever, because any passphrase revealed might not be the one for the "true" stash of information. In reality, the torturer does not stop at the first possible instance of revelation, but on the last (which will never be in this case).
Plausible deniability actually prevents the torturer from rewarding the victim for the revelation of information by ending his/her pain. Instead, plausible deniability opens the spiral of endless violence.