To me this is effectively overtaking on the left. According to NSW government:
"The only time you can overtake on the left is when the vehicle you're overtaking is:
- waiting to turn right or make a U-turn from the centre of the road.
- stopped.
- travelling on a multi-lane road."
In this scenario because the road is not multi-laned it doesn't seem permitted.
I'd probably add people break road rules all the time both knowingly and unknowingly .