Looking at the legislative history, it seems to be a cock-up born of a split at the select committee stage in the 2007 Armed Forces Law Reform Bill (AFLRB). As introduced, the provision was in new s144ZJ of the AFLRB, as part of new part 6A which established and empowered the Court Martial. But the select committee decided to yank out that part and move it around to form the new Court Martial Act. In doing so, they shifted most of the specific powers, but weirdly put old 144ZJ in its new place as s145 Armed Forces Discipline Act.
And related: the BORA assessment (which I think used an early draft) assesses the provisions to clear the court and issue suppression orders and finds them justified, but only in the context of powers of the Court martial or Summary Appeal Court. It does not seem to contemplate their use by commanding officers.