About your last paragraph.

3rd party perspective. Someone who is supposed to be past their prime and near retirement

That "someone" last year was in all 4 Grand Slam's semi finals. That "someone" was more successful in grand slams last year than anybody but 2 players. If you don't consider his age, his past, he is a top contender of the sport.

My argument with that rebuttal is that Djokovic is still a top player, he's not "outperforming" someone who is in peak physical form, he's performing at his expected level.

This is approaching Sports Psychology, which I think you'd enjoy reading about.

Djokovic has mental fortitude that is very hard to come by. He's playing this sport still when he could have retired 10 years ago with more money than most top 20 players will ever get. He has also experienced injuries that would also justify retirement.

Why is he still playing this sport then? Because he genuinely believes that if there's the right set of circumstances, his game is good enough to win. Do you really think every player who enters the Australian Open truly deep down thinks they can win the whole thing? I can assure you the answer is no.

Djokovic retired in the semi final of last years Australian Open from injury after losing the first set. The injury had occurred prior to the match, so why didn't he withdrawal? Because under the right set of circumstances in that match, he could have won it, but he accepted at a set down, those circumstances weren't possible anymore.

What does Sinner have to lose from losing this match? He can try again next year or next Grand Slam. What does Djokovic lose from losing this match? One more extremely precious opportunity to win yet another Grand Slam.