1. Your password is required online where the full password must be entered and the numerically reduced password is not accepted. This results in no loss of difficulty in the password.

2. Your password is required over the phone where the password is reduced to a T9 password. Despite the fact that the solution space has been cut down significantly (by 33%^n), the password cannot be broken any quicker because the bottleneck for this case is not computational power but rather the phone system. You can brute force all of the passwords in X seconds, but this is irrelevant because you can't try more than 1 password per call and you can't call more than Y times per second.