Passphrase is an optional feature of the Trezor device that is recommended for advanced users only. It is a word or a sentence of the user's choice. Its main purpose is to access a completely new wallet.
What should the user know before using passphrase
Technical explanation. The passphrase is defined by the BIP39 standard. It is an optional part of the master seed of a wallet. When the passphrase feature is turned on in Trezor device, the user is asked to enter a passphrase every time the device is connected. In accordance with BIP39, the selected passphrase is mixed with the seed stored by the Trezor device to create a unique master seed and thus a unique cryptocurrency wallet.
The selected passphrase works like the 25th word of the recovery seed that is not stored on the device. Every time you access your wallet you need to enter exactly the same passphrase. If you mistype the passphrase, a different (typically empty) wallet is opened. Of course, you can use this feature to have more independent wallets based on the same recovery seed.
This means that both the recovery seed and the passphrase (if used) are essential for the recovery of a wallet. Also, the passphrase feature doesn't really encrypt the seed or the wallet, it is itself part of the BIP32 seed. So maybe the term passphrase encryption shouldn't be used.