Extra-territorial operation of laws is complicated. I think you’ll find that, as a matter of principle, Australian airspace declarations may validly apply, extra-territorially, to Australians and Australian aircraft. However, if the terms of the airspace legislation confines the declaration powers to airspace within Australian territory, those powers cannot validly declare airspace beyond Australian territory.
If the ADF thinks other countries recognise Romeos beyond 12nms of the baseline as legally binding, the ADF is operating in blissful ignorance. I doubt even the ADF is that naive.