Has anyone developed anything that would completely delete a disk when a decoy password is typed in, whilst displaying a fake OS instance filled with a legit looking my docs, internet history etc?

In that case you give them the decoy password and they clear your machine for you

This idea sounds nice, but in practice it will only be useful when the investigators are completely incompetent.

Any competent investigator will make backups of your disk, and work only on the backup. They'll probably also use their own tools to decrypt any content on the disk, rather than booting up the suspect's OS and relying on the suspect's tools.

Also, for trying something like this, you'll probably face additional destruction of evidence and obstruction of justice charges.