That is an incorrect statement for one of the operators involved in this incident. Whist the ILS approach is only certified to Cat I minima, autoland and on RWY23 was (and still is) permitted by the operator.
But only in CAT I conditions or better.
B) Divert to the 'suitable airport' as per the regs and their own Airlines exposition.
As far as I read it, at the time the decision was made and the information available to them diversion was the only option.
If hypothetically Mildura remained CAVOK and you autolanded in CAT II conditions on a CAT I ILS you would have a alot of explaining to do. The ATSB is kidding themselves if they are subtly suggesting that this is what should have happened.
Surely the main take home message from this is it all would have been a non event if they carried more fuel.
But how much more? Full fuel?