Note: I have little expertise in Law, but this is all purely my opinions + 2 mins of research, so don't take anything I say as gospel.
how would individuals whom are willing to transfer be accepted as they would not prioritise them first (even if they achieve the WAM)
There are still ways to ensure you get prioritised. I assume that you can still take Law units as electives as an Arts student, even without being an Arts (Law pathway) student, as well as some other pathways that I'm probably not aware of. I'd check what alternatives you have with Monash Connect or at the Caulfield campus when December 17 (Change of Preference Day) rolls around.
Even if all goes downhill (which I hope not; touch wood), a postgrad course such as the JD is another way to tackle the world of law and you can try other things you didn't think you could do until then. Alternatively, you could do Law elsewhere (e.g. Deakin) and try an external transfer! They usually get some type of priority, given they've usually had some solid foundations in law already.
Either way, I wish you luck and hope you can get into Monash Law first try.