I strongly disagree with this interpretation. It's an old argument, I follow the reasoning behind it (I actually think the author does a good job arguing in favor of this position), but at the end of the day I'm just too uncomfortable with how this would work in practice.
During a normal search, they get a warrant, tell you to produce some documents, and if you don't comply then they go get the documents themselves. If they can't find the documents, then they can come back to you with obstruction or contempt charges, but this is the rare case.
With passwords, the rare case becomes the common case. Enough people are going to suddenly "forget" their passwords that law enforcement and judges are going to roll their eyes and throw the book at anyone who actually forgets a password.
I don't believe it's possible for anyone to prove that someone knows a password. People can forget at any time, for any number of reasons, including trauma.
What's going to happen when police have evidence that I did, at one point, know the extra-super-secret password to some old confidential document that I set up a pgp key to encrypt and promptly forgot about? What about when my harebrained DIY deniable encryption scheme means that I genuinely don't know which of the following hundred-thousand files I know the password to, even though I obviously must know, because I set it up in the first place?
There's no law against being a paranoid doofus.