Surely for this system to help in allowing you to plausibly say that, you'd have to reference this system (or equivalent) and demonstrate that it is indeed used for the authentication the police want access to. And in that case, surely the police could just say "in that case, please authenticate for us"?
The real problem is the device stores the password, so the real defence is the tamperproof-ness of the device, not whether you can be tricked or coerced into outputting the sequence.
"Since our aim is to prevent users from effectively transmitting the ability to authenticate to others, there remains an attack where an adversary coerces a user to authenticate while they are under ad- versary control. It is possible to reduce the effective- ness of this technique if the system could detect if the user is under duress. Some behaviors such as timed re- sponses to stimuli may detectably change when the user is under duress."