As a general rule, schools are unable to restrict you from doing a VCE subject particularly at the Unit 3 or 4 level unless it is a VCAA mandated prerequisite (for which there are not many...) OR if there are limitations at the school-level which prevent you from enrolling in it e.g. class numbers, lack of qualified teacher, doesn't fit in the blocking of the timetable, etc. They can strongly recommend and put to you and your parents that they don't think you should be doing it, but ultimately in the end if all school-level limitations aren't there, they can't say no.
I would consider the "requirement" to be more of a recommendation before going into it.
I would definitely speak to somebody about this if you are that keen to do Physics without General Maths. State why you want to do it and put your case forward.
I also would raise a few points re: your post (and please feel free to correct me if i've misinterpreted). You say that you need Physics OR Methods and my understanding is you want to do Physics because you dislike maths and want to get around the Methods requirement.
I would raise (and any biomed/med students can post to confirm or otherwise?) the point that perhaps you are taking the wrong approach here. I would say that any science-based discipline is complemented by a maths understanding and to not do that would perhaps be counter-productive and be a disadvantage to you? Something to think about at least.
Cheers