It may not be even close to unbreakable or torture-free as the author implies, but this encryption system (or similar approaches) could work to tighten some classic security flaws with passwords.
For instance, this could prevent employees of a large corporations from writing down or sharing a password with a coworker, or even spelling out their password over the phone to a bogus "support engineer" -- although probably fingerprint/eye/face recognition systems are more practical and easy to implement than a "guitar hero" learning session. But then the OP method has an advantage over those: you can change your implicit-learned password easier than your face or fingerprint...
For instance, this could prevent employees of a large corporations from writing down or sharing a password with a coworker, or even spelling out their password over the phone to a bogus "support engineer" -- although probably fingerprint/eye/face recognition systems are more practical and easy to implement than a "guitar hero" learning session. But then the OP method has an advantage over those: you can change your implicit-learned password easier than your face or fingerprint...