Leaddie:
Australia can make laws that have extra-territorial effect on and application to persons and things connected with Australia. That’s why it’s offence, under Australian law, for an Australian to engage a VH-registered aircraft in commercial operations in Swaziland, without an AOC issued under the Australian Civil Aviation Act.
It is true that Australia has no jurisdiction to purport to promulgate Romeo airspace binding on foreign aircraft in international airspace. But Australia does have jurisdiction to promulgate Romeo airspace binding on Australian aircraft in international airspace.
I could be wrong, though. Put your money where your mouth is: Jump into a VH-registered aircraft and fly around in an active Australian Romeo, 13 nms on the seaward side of the territorial sea baseline. Plenty off e.g. Nowra and Williamtown to choose from. Let us know how you go.
(However, I agree that “the volume of various kinds of mil. airspace in Australia is ridiculous”.)