"sort of defense" is right. When the people with rubber hoses know you are using a "deniable" encryption system, they have little incentive to stop beating you after the first, second, or any subsequent decryption.
Exactly. So don't let anybody know & let it decrypt to something plausible. FYI there is no way of distinguishing Rubberhose from drive with random data.
You can nest the volumes. So give attacker A-->B-->C instead of A-->D-->E Also, there is no way of proving the existence of a hidden volume. It basically makes the Rubberhose attack unreliable as an attack vector. That doesn't mean some poor soul won't be beaten again, it just means that the folks doing the beating aren't so sure this $5 wrench is a decent attack vector.