Plausible deniability is the possibility (usually offered by a technology) to trick an attacker that intends to violate our privacy into believing that we gave him access to the data container he was looking for while in fact we  gave him access to a different data container. In short, it's the principle behind the double-bottom suitcase.

Encryption, and in particular the VeraCrypt software, offer a plausible deniability so powerful that, if some precautions are taken (see here), there is no way an attacker can technically prove that there is a 'double bottom' (even when he suspects that there is).

Plausible deniability technology is important for example in authoritarian countries (including many western democracies) that have  made it a crime for the individual not to decrypt encrypted data at the  request of authority.

Plausible deniability technology is also useful in Bitcoin storage. As we shall see in the next course, Bitcoin seeds and private keys should  be held in cold, multisig wallets which are geographically dispersed and therefore physically inaccessible by the owner on short notice and at the attacker request. However, for those Bitcoin seeds and information that the owner may decide to maintain immediately available to him, plausible deniability offers an additional layer of protection against a violent attack.