Example: Jimmy borrows 50,000 0.0001 BTC bank notes from the bank to help buy a house, which is worth 5 BTC. The price of BTC in wheat bushel equivalents (or whatever consumer price equivalents) increases two-fold in a year, and now Jimmy owes the bank twice as much. But wait! What if Jimmy instead borrowed against the value of wheat? Jimmy owes 200,000 wheat bushel equivalents in this year and next, and the "price" of wheat bushels has more or less stayed the same even though BTC value has fluctuated a lot -- so Jimmy is okay.
Except that Jimmy isn't the only debtor in this scenario the bank is one as well so now the depositors will have to accept that their deposits are indexed to deflation. Except they don't have to as they can withdraw their BTC.