What is ironic about the inscription "Work is liberty!" on the door next to Auschwitz?

the word "liberty" conveys the meaning of freedom. There is no freedom inside this camp.

These false words were ment to give them hope that they would be able to leave if they worked hard enough.

It's a false statement, giving the jews the goal they need to work harder for the Nazi's in exchange for their freedom. Liberty is quite the opposite in the concentration camp.