The accused can't be compelled to produce a password, and the prosecution can't use the defendant's silence as an argument against them. BUT the police can explain in court that they were unable to search and/or seize what's listed on the warrant due to an unknown password and unbreakable encryption.
In other words, they can't say "Joe wouldn't give us his phone password and that means he's guilty". But they can say "we were unable to search his phone or collect these documents listed on the warrant due to unbreakable phone security".
There's not a huge difference between those two statements when it comes to the jury. They'll understand that evidence is missing, and that the defendant can probably produce it but won't. Maybe civil libertarians won't like that, but I think that's misplaced: there is a warrant, remember, it's not just a random search. And the defendant can always produce it if it's exculpatory.