Zayne Jason William McMillan, 23, was seen in January pretending to hold a long-arm rifle on the site of the Bondi mass shooting a month earlier.
The First Nations man was heard to yell "f*** the Jews" before going on to intimidate two Jewish men in front of their children during a 20-minute racist tirade.
He was jailed for a year after pleading guilty to three counts of offensive language and two counts of intimidation.
In an attempt to reduce that sentence on Thursday, McMillan's barrister Stephen Alexander told an appeal hearing his client had been discussing Palestine with a Jewish man before the incident.
"You're stealing land and killing women and children just like the white man did to us," the 23-year-old Koori man allegedly said before being told he had no idea what he was talking about.
McMillan told prison officers he was a victim of aggression who was justified in his actions, Acting District Court Judge Antony Townsden heard.
Mr Alexander said his client expressed genuine remorse for his out-of-control conversation, which could be seen as deeply offensive and harmful.
However, the barrister's submissions that the issue was "complicated" and in a "grey area" were roundly rejected.
"I just don't think it's complicated," Judge Townsden said.
McMillan had tried to blame a person living in Sydney for the actions of a government on the other side of the world, the judge noted.
"That is, on any view, not only anti-Semitic but the behaviour is quite cowardly," he said.
Crown prosecutor Joseph Gilbert said the court should denounce someone who had experienced racism choosing to shift that onto another race.
He argued that the initial sentence should be upheld.
Judge Townsden agreed.
He dismissed the appeal, noting that McMillan's "deeply concerning" actions had occurred while he was out on parole for separate stalk and intimidate offences.
The 23-year-old's road to rehabilitation would be better served behind bars, the judge said.
His nine-month non-parole period for the Bondi incident is due to expire in November.
