NSW Premier Chris Minns was warned that overreaching hate speech laws and excessive policing in the aftermath of the Bondi terrorist attack would alienate communities.
People would also be less likely to co-operate with authorities, the NSW Cabinet Office national security executive director said on December 23.
But hours later, the Minns government passed laws handing the police commissioner extra powers to restrict protests in certain areas.
Attorney-General Michael Daley rejected the protest restrictions would lead to further radicalisation during a heated exchange with Greens justice spokeswoman Sue Higginson at a parliamentary hearing on Wednesday.
The laws mirrored the premier's call to have a summer of peace, not protest, and to be respectful following the terror attack, he said.
"I cannot see how, for the life of me, how someone would say that's going to contribute to radicalisation," Mr Daley said.
Ms Higginson pressed the attorney-general on why expert advice was not taken before "foisting those ridiculous laws" on parliament and the state's 8.2 million people.
"What do you say to the fact that it is clearly stated that 'legislation doesn't change behaviour'?" she asked.
"Your advice was legislation not only is not going to help, it's unhelpful."
Mr Daley retorted: "To the extent anyone ... (gave) advice to me or the government in that respect, I reject it because it is nonsensical to say that."
Protests were still able to take place in his electorate of Maroubra and other areas of the city, he said.
"How does that take it underground?" he said.
The laws restricted protest across Sydney for the four weeks after Christmas Eve before a tighter cordon was drawn around the eastern suburbs and the city centre's north, taking in state parliament, Sydney Town Hall and Bondi.
The restrictions on granting protesters immunity from traffic laws were lifted completely in mid-February.
Violent clashes between police and protesters broke out during Israeli President Isaac Herzog's Australian visit in February, when demonstrators at Town Hall tried to march to state parliament.
Officers also forcefully dragged Muslim men who were performing sunset prayers, causing a breakdown between the community and the government.
The confidential security advice, obtained by AAP, outlined legislative responses to hate speech, not the protest and gun reform passing parliament on Christmas Eve.
But the advice did warn of anti-terror and consorting laws disproportionately targeting minority communities.
"Worst case, perceived injustice or targeting can fuel resentment and increase the risk of radicalisation," the briefing note said.
"Expanded police powers and/or aggressive enforcement can damage trust between police and communities, undermining broader efforts to counter extremism through partnership and prevention."
Extremism experts warn that exacerbating social grievances can make people more susceptible to radicalisation.
24°C