There are fundamental differences between selling to create a loss to apply against other immediate gains (gains already made or shortly to be made) and selling at a profit to potentially mitigate CGT in future years.
The most obvious one is that there is an immediately guaranteed tax advantage with the former, but not with the latter. You have the gain, or will shortly have the gain, which will be subject to tax, but by doing a wash sale you can avoid paying some or all of that tax. With the latter, there is no guarantee that the repurchased shares will subsequently increase in value, so everything else being equal, your tax bill will be the same, zero if under the first threshold.
The other difference is that you are actually paying tax on the gains made on the initial sale. You are not avoiding tax, but just happen to be taxed at 0% since you are below the threshold. It would be the same situation if this year you are in the 19% bracket but expect to be in the 32.5% bracket in subsequent years. You might decide to sell the shares now and be hit by the 19% tax, then buy back at the higher price so when you subsequently sell only the additional gain will be hit by 32.5% tax. And, unlike the wash sale scenario, you could even end up paying more tax than otherwise. If the shares went down in value to the original first purchase price so that you have made no gain at all, you now have paid 19% tax on the interim sale gain, whereas if you held on there would have been no tax at all payable. You do end up with a carry forward loss, but that may never be usable.
I agree that superficially both seem to be similar in ways. But when I raised this on another forum, an accountant (not my own one that confirmed it as ok a few weeks ago) made the point that paying tax, even at the 0% rate, is still paying tax and cannot be seen as tax avoidance.
Although you said the ATO is unlikely to pursue someone under the tax free threshold, I would have expected that if it were not seen as fully legitimate then there would be cases where it was tried by people in some of the upper tax brackets (say someone on 32.5% or 37% pulling tax forward by this method so as to subsequently avoid been hit by the 45% rate). I haven’t come across any such cases where the ATO knocked them back and I have researched this topic a lot. I would be interested if there is some example of this not being allowed, as apart from an individual like that of the OP using the tactic, I could see it being very useful for family trust distributions. For instance, selling and subsequently buying shares back to generate capital gains to distribute to a beneficiary who is in the zero tax bracket.
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