Having read the report, but without the full benefit of replays, etc IMHO ATSB may have missed the target. It seems to be a case of assigning a level verbally and entering a different CFL. This happens more frequently than it should and is a case that warrants more research than it gets. The HO-TO is a red herring, but perhaps it's easier to make recommendations on that than to look at the deeper problem.
Again from the report, the resolution of the incident appears to have been initiated by the controller as part of his scan, co-incident with STCA and (maybe?) before TCAS.