You are correct, you have to give up the phone but can't be compelled to give up the password, and you'd get it back some indeterminate amount of time later.

It's actually been on the books for a while (decades at least) that customs can search you at the border without a warrant even if you are a citizen.

This case seems to have become a big 'Trump bad' poster child (people are calling the US East Germany in these comments...), but if this exact scenario happened at least in the last two decades (I found an example upholding the searches from 2004) then it would at least be possible to charge them with deleting evidence. Even this probably would have been nothing if he refused to give up his password, not being required to provide a password has been upheld for years. They can seize your phone for some time but I'm unsure on the times they ask and then just let you move on when they find out your a citizen.