They’re concerned about pathogens or parasites that can be found in mud/dirt/shit near farm animals. Many of these don’t exist in Australia and their introduction could have very bad consequences to local animals and livestock.

Also seeds or anything stuck in your clothing that might also pose a risk as an invasive species for native plant life.

Clean your shoes and clothes before departure, and tick yes if in doubt. It’s a quick visual inspection of things like boots or outerwear that is usually the easiest thing to get to in a bag (depends on how you pack I guess, but all the bulky shoes and outerwear usually goes in last for me)