This means that if you have a large set of random-looking data, they can already lock you up. Hidden containers (encryption hidden within encryption), as possible with Truecrypt, do not help either. They will just assume the hidden container is there and unless you hand over the key, you will stay locked up. Don't have a hidden container? Though luck. Anybody could claim that.
It assumes there are only two possibilities, either you live in a "free country" where you can refuse to hand over the key, or you live in a totalitarian state where the police will decide to beat you if they suspect you have crypto software, and will keep doing so no matter what you say.
There is a lot of middle ground there. For example in the UK, I believe you are legally required to provide the decryption password. But I don't think the police there would be likely to beat you if they think you may have a hidden container. They could argue that they believe you do, and you would respond with "prove it!", and I doubt it would go any further (unless they had some evidence that you specifically were using hidden containers).
There is value in hidden containers in some circumstances. It's disappointing to see the cryptsetup maintainers take this position.
Hidden containers perhaps won't be enough to protect you from being locked up, but that is not always their purpose. One purpose of hidden containers is to make the presence of information hidden from the attacker. They may lock you up, but they will never really know if you had encrypted information or not. That means you win something.
This means that if you have a large set of random-looking data, they can already lock you up. Hidden containers (encryption hidden within encryption), as possible with Truecrypt, do not help either. They will just assume the hidden container is there and unless you hand over the key, you will stay locked up. Don't have a hidden container? Though luck. Anybody could claim that.