They won’t ban the site, they will just fine them for not verifying age (30,000 penalty units, 1 federal penalty unit is $110).

Lemmy does fit the definition outlined in the act, the thing they haven’t defined is what the reasonable steps will be to verify age. It will likely only apply to sites hosted or with a presence in Australia. Its not like they can fine an instance in a random country although maybe if it’s a jurisdiction that will play ball (maybe 5 eyes countries, maybe close trading partners).