[PHI 3000] You can't handle the truth!

Some philosophers endorse the notion of "pragmatic encroachment," according to which there is some connection between practical interests and epistemic justification. For instance, Fantl and McGrath (2002: 77) argue for the following "pragmatic necessary condition on epistemic justification":

(PC) S is justified in believing that p only if S is rational to prefer as if p.

Now, suppose for the sake of argument that (PC) is true. Suppose further that p is a true proposition whose truth S cannot handle.

In that case, if p is a true proposition whose truth S cannot handle, then it is not the case that S is rational to prefer as if p. But if S is not rational to prefer as if p, then, by (PC), it follows that S is not justified in believing that p. That is:

1. S is justified in believing that p only if S is rational to prefer as if p.
2. S is not rational to prefer as if p. [Since p is a true proposition whose truth S cannot handle]
3. Therefore, S is not justified in believing that p.

If this is correct, then (PC) implies that S is not justified in believing a true proposition. Is this an absurd consequence of (PC)?