They can demand a password from you, you can refuse to give it, and they can then decide not to let you in the country. Being polite and respectful in your refusal to share an encryption key can mean less trouble.
A point that might have caused confusion: they can seize your device. The document does not specify what happens if you decline to give the device (as in whether you are arrested or simply declined entry to the country). As far as I understand the references, courts have not had to decide on this question yet.
