This story really resonated with me as someone who is grappling with the effects of Brexit and loss of the freedom to live and work in Europe.
You've managed to sum up the nastiness of the immigration regime in this country perfectly. The point you make about how because you're Australian doesn't mean you're an immigrant is very poignant.
It is a subtle form of racism as you say. For some reason, there is a real fear of 'others' in the UK. By others, I mean anyone who speaks a foreign language and looks a bit different. I despair at what has happened in this country since 2010. I'm glad you don't have to worry about getting deported now you're a British citizen. We should be opening up our countries to immigrants not closing them off.
Unfortunately, I think the hostile environment will be here for a while longer.