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Melbourne man first to be charged under new law banning Nazi salute in Victoria
(www.theguardian.com)
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Not from Victoria and not a lawyer but...
Yes I expect it's "up to $x and up to y years in prison".
I don't really think that there's a challenge to be made against the law itself. We don't have "constitutional free speech". I'm not certain but IIRC the right to criticise the government is enshrined in case law.
It's possible or likely that far right advocacy groups will dream up one or more "test cases". A bit like Rosa Parks where the set of the most favourable circumstances possible are manufactured and then the group puts their weight behind fighting the case in court.
With this strategy they can't really neuter the law but they could get the court to adopt a more generous interpretation of "ought to have known" than the law had intended.