I would say there is a chance that he thought he would be given a clearance without delay down the coast .
When he was told to remain outside the Williamtown zone and he was getting closer to the invisible line in the sky where he would have his license lifted if he crossed without permission from the RAAF he decided to take the chance and head on the riskier inland route as required by the RAAF if you dare to fly down the coast from Coolangatta to Bankstown .
A little later the gyro failed so instead of heading south towards Singleton he headed west towards the top of the mountain range.
Of course this error may have been visible on the RAAF radar but it wasn't the responsibility of that operator - even if the mistake was seen- to inform anyone.
The poor FSO ( that pilot by law must remain on his frequency ) just has a microphone , headset and a few paper strips and had no idea the radar screen at Williamtown could have easily shown the catastrophe unfolding.
And not one recommendation was made by the BASI investigators to fix this. That's resistance to change for you that continues today.