Which TWRP?
Regarding the custom 3.2.3 …
“default_password” is for when you set screen lock to “None” or “Swipe” in the OS before encrypting …
You can encrypt without setting a decryption PIN/password/pattern by setting screen lock to “None” or “Swipe” in the OS before encrypting.
TWRP may ask for a password nonetheless … “default_password” can be used in this case in the custom TWRP 3.2.3, while official TWRP 3.2.3-0 might accept “none” for this.
Seems to be a TWRP feature, happens with every character and the delete “key”. Perhaps there to prevent accidental double input?