The challenging geology was why one of the previous proposals had the line moved inland and 'touch down' into the Wollongong suburbs much further south.
But that then cuts off all the suburbs north of there who currently have a direct if a somewhat windy connection to Sydney and keeping the old line to serve Helensburgh to Austimer stations rather degrades the case for the new route, but if you don't the political uproar is also unacceptable.
I also read somewhere once that the long tunnel proposed to get down from the top of the escarpment would preclude the use of diesel on the coal trains - the only real revenue earner on the route and already at the time of the diversion tunnel proposal the coal operation was talking down the electrics and talking up diesel power. They were not really interested in any proposal that limited traction to electric.
Really they need to drop a TBM down a pit near Helensburgh and keep boring till they pop out of the escarpment near Thirroul, with a nice long and even graded tunnel. Can't see it ever happening. The moment you suggest any existing station be abandoned 'for the greater good', there will be howls of protest and the politicians will freeze up and no decision will be made. Status Quo.
The freight side will also protest loudly against any proposal that limits their traction choice too.
So a long tunnel is out. This leaves spending increasingly large amounts of money propping up a challenging route.
I can't see the Helensburgh - Stanwell park tunnel ever being reactivated. It's single track for a start. It's been damaged (at one point deliberately, the southern portal was blown up in WWII in case the Japanese used it to attack Sydney!)
. The route on either side is now occupied by housing, all manner of sometimes endangered wildlife has moved into the bits of the formation not occupied by housing.
Stranger things have happened of course, but I doubt it.