If the thief does not know exactly how much Bitcoin you own (and here privacy is essential), you can leave a small amount of $1000 using wallet seed and your full balance by adding a passphrase. It may be useful in some cases such as kidnapping or threats.
That will effectively create two different wallets, but I don't think we can create two different wallets with the same seed phrase and separate them with a passphrase???
When we create a wallet, Electrum will generate a seed phrase, and if we do not add the passphrase to it, it generates a wallet. Now, after the creation of that wallet, we cannot create another wallet with the same seed phrases and add the passphrase. So now, if there is any kidnapping threat, how can that help?
I guess you can still get different wallets having the same seed phrases but different passphrases, and Electrum allows this. Let me tell you how this works.
First, create a wallet with a seed and do not enter a passphrase. So this is the wallet that you can give the seed phrase to anyone if ever you're forced to do so. Now, the other wallet you can get is when you restore that wallet, the electurm ask for the passphrase, and here, when you give the passphrase, it becomes another hidden wallet.
