Of course they'd say that.
I'd be chasing it up with RTA or an inspection station or somewhere. I know up here in qld vehicles were getting defected for not having their sway bars in.
I'm 99% sure its not legal on road.
Edit, sorry i just read your earlier post. I honestly can't see how they'd be okay with it. Must be different rules down there.
Im not sure if you read my earlier posts but i did check it with the RTA and they said there is NO law in nsw that states you HAVE to run a sway bar, so its perfectly legal and will not be an issue as far as passing any RTA inspection or passing for rego, and that was after i was transferred to the RTA technical/ modification department
Oopps just read your edit lol, personally i dont see why it would be a problem, Honestly believe it or not i cant tell the difference in any MAJOR way it is so minor i dont have an issue driving it with my family in the car.
I drove my old D40 for 100,000km and this one for 30,000km with the sway bar and have now done 25,000km with out it and i drive pretty hard every where i go and i also carry heaps of roofing materials on the roof racks ect, i just dont understand why a bar so thick can do so little as far as on rd handling, if you havnt driven with out it you would think it would handle or sail like a ship but is doesnt