If the Minister in deciding to refuse the grant of a protection visa to a person to whom Australia does owe protection obligations says, in the reasons, that he wishes to consider ‘alternative management’ options than indefinite detention, then he may have misunderstood s 197C and therefore made an unlawful decision. See DMH16 v Minister for Immigration and Border Protection  FCA 448.
It is not enough for a Tribunal to conclude, in a s 501 character review, that the applicant has a prospect of release from indefinite detention through the exercise of Ministerial discretion. The legal consequences of a character refusal will often be indefinite detention (for example, if the person engages Australia’s protection obligations), and that, and only that, is certain. It therefore must be considered by the Tribunal. Anything about what might happen (other than indefinite detention) to the applicant is speculative. See eg NBMZ v Minister for Immigration and Border Protection  FCAFC 38; 220 FCR 1; BCR16 v Minister for Immigration and Border Protection  FCAFC 96; DEY16  FCA 1261.