yeh, they say that, but you are disadvantaged
The whole process favours home state applicants as they are the only ones who will get offers in the main round. The best of the interstaters will fight it our for the remainding spots in the late or final round.
The email they send you when they offer you an interview says this:
"5. If the results of their interview, together with their academic and
UMAT results, exceed the cutoff that was required for entry into UNSW
Medicine in the main round of offers, they will be offered a place in
the UNSW Medicine course in the late round of offers."
So, apparently, you don't actually need to 'fight for a place in the late round'. As long as you do as well as the NSW'ers in the main round, you get an offer.