If by "tire deflection" you mean the tire bouncing on a surface, that is a small part of "rolling resistance". Most of the rolling resistance is due to deformation of the tire as you weight and unweight the contact patch. If you increase the pressure in the tire, the tire becomes more rigid and the rolling resistance due to the deformation decreases which is why higher pressure tires roll faster than lower pressure tires. You do reach a limit where the tire starts to bounce and you lose energy but that is a small fraction of the deformation derived resistance.

The reason that wider tires have lower rolling resistance is because the walls of the tire deflect less as a percentage of their cross section and have a shorter section of deflected sidewall. The difference between a 23mm tire and a 25mm tire is about 5% but I suspect that going to a wider and wider tire results in diminishing returns because other factors, like weight and higher friction, come into play. Going from a 23mm tire to a 42mm tire probably isn't going to result in too many advantages. Going from a 23mm tire to a 25mm or 28mm results in only a small advantage without gaining too much weight or front surface area.