

That exists. The thing to watch is the difference between separate profiles and a hidden one.
Graphene gives you multiple profiles with their own passwords, but profiles are enumerable. Anyone poking at the device sees that profile 2 is there, so “open that one too” is the obvious next sentence.
The version you’re describing works when the second environment can’t be shown to exist at all, so it reads as encrypted random noise, which is what empty encrypted space looks like anyway. One PIN gets you a full boring phone, the other gets you your real one.
Only holds up if the boring phone is actually convincing though. Six apps and no photos fails on the spot.
(I work on DeniableOS, which does the hidden version, so weigh that how you like.)
Good writeup, and the downside you flagged is the interesting bit. Profiles are enumerable. A dummy profile survives a glance at the screen and stops working the second someone can see profile 2 exists and asks you to open it.
The property you want on top of your setup is that the second thing can’t be shown to exist at all, so it looks like random noise rather than a locked door. Then the dummy isn’t a dummy, it’s just the phone.
(I work on DeniableOS, which is built around that. Your profile setup is still the right free answer for most people and I wouldn’t talk anyone out of it.)