How does that inscription come to embody the deceit and bitter irony of the Nazi camps?

Question

Eliezer observes the now-infamous inscription above the entrance to Auschwitz, equating work with liberty.

Answer 1

As Charlie has put it - "Arbeit Macht Frei" was the inscription displayed above the entrances to the concentration camps, and since many people never worked, or were worked to death, and/or never survived to be freed by the Allies - the slogan was highly deceptive and bitterly ironic.

Answer 2

"Work shall set you free!" The epitomy of the Nazis' lies. Not only was the statement not true, but that it was on the gate of one of the most horribly efficient death camps made the lie ironic.