Having effectively closed their borders, Australia has kept themselves very isolated from the rest of the world, and while as you say quarantine is a possibility, I guess there is a moral argument that comes into play. I don't know, I just know from working in the travel industry throughout this pandemic that of all the countries due to participate in ESC this year, Australia was the one that might struggle with international travel.
But let's wait for official news I guess. We'll still get to see the on-tape performance at least, it's a good thing EBU planned for that