The pilots made the decision to go to Mildura based on a very favourable forecast that was issued by the BOM despite the BOM knowing or having the ability to know that fog was forming at the time they issuing a good forecast.
The report actually says something quite different:
"The 0358 amended TAF for Mildura that morning forecast light winds and scattered cloud at 3,000 ft and broken cloud at 6,000 ft. The TAF also included TEMPO periods between 0500 and 1000 in which the cloud base was forecast to reduce to 600 ft AGL.
A new routine TAF was issued for Mildura at 0902 that was valid from 1000. This TAF forecasted visibility in excess of 10 km and scattered cloud at 3,000 and 5,000 ft. No significant weather was listed on the TAF and no indication of low cloud or fog was given. Neither crew were aware of this TAF nor would they have been able to use this forecast in support of their decision to divert..."
"The METAR observation reports issued for Mildura at 0830 and 0900 showed light winds, visibility in excess of 10 km and the cloud lifting from broken at 3,400 to broken at 3,900 ft. These were the reports obtained by the crew of Velocity 1384 and Qantas 735 to assist their decision making about diverting to Mildura.
The BoM reported that their assessment of Mildura at around 0830 showed that low cloud was more likely to occur than fog. In addition, improved conditions could be expected from 1000 as the wind was forecast to tend southerly and both fog and low cloud were rare in a southerly flow at Mildura. Based on this information, the forecast for TEMPO conditions was continued.
At around 0900, weather recording instrumentation at Mildura started to indicate patches of low cloud at around 400 ft. A visual satellite image indicated a bank of low cloud south of Mildura indicating that the prediction of temporary (TEMPO) deteriorations was still appropriate."
With all due respect, it seems to me that it's quite wrong to suggest the aircraft based their diversion decisions on a 'very favourable forecast that was issued by the BOM despite the BOM knowing or having the ability to know that fog was forming at the time they issuing a good forecast'.
The first SPECI for low cloud at 200ft was issued at 0918, by which time both aircraft were already on their way to Mildura. That SPECI was not relayed to the aircraft and neither was an airborne report from an aircraft that departed Mildura at 0916. Thereafter, the visibility reduced rapidly from 28km to 1,000m between 0925 and 0931. Several SPECIS to that effect were issued between 0928 and 0932, the last of which was broadcast on the area frequency by the controller. However, CVR data showed that the crews were busy communicating on the CTAF frequency at the time, so it was probably not heard.