If the airport is classed as Cat C, not suitable, then why bother nominate it as an EDTO alternate. It's your licence. Why would you fly on one engine, further than you had to do so, over nothing but water.
I don't work for QF/JQ, but I'm guessing it goes something like this:
For ETOPS planning purposes, Majuro meets the legal requirements and is considered acceptable to be nominated as an enroute alternate. That is, if the s@#t hits the fan, the aircraft COULD land there if necessary. That doesn't mean it MUST go there. As stated previously, under Australia's CAOs (and QF/JQ rules apparently) there is no requirement to land at the nearest adequate airport if such action is deemed to be safe and operationally acceptable. That gives the commander much more leeway in deciding where to go in the event of a failure.
In a nutshell - Majuro isn't considered desirable ('suitable'?) as a diversion port and isn't approved as such by QF, however, it is 'adequate' and an aircraft could land there if the situation demands it.