Rereading, I now noticed that one of my suspicions may indeed be the case.
She said that, if he could find the code, he could get free, and then just leave through the ceiling, meaning that the water would still need to reach a high level.
But if he cuts his hands, he would still need to wait, without a hand, while bleeding (from the rusty cleaver), inside the water. That too should kill him.
So the options are:
- Find the code and be freed (would likely have some other surprise though),
- die slow (don't cut hand),
- die even slower (cut hand).