But in Australian politics, Indonesia as a potential, albeit very unlikely, threat has been discussed, with the point being that 275 million people in a somewhat politically unstable country has that potential.
It's only in this century that Indonesia has become a functioning democracy and has had authoritarian and sometimes brutal leaders, slaughtering hundreds of thousands, in the not so distant past. It currently has relatively good relations with Australia but they are not close or secure. No one is accusing them of anything but there is a non-zero chance of them becoming a threat.
If China can credibly restrict shipping in the south of the South China sea, then that accrues substantial economic power in the coming decades.
Which is another way of saying that if Malaysia, Indonesia, and the Philippines don't believe in the US's regional power projection, they'll allow China to do as it wants.
In any escalation scenario, Guam gets plastered. Taiwan is blockaded. Okinawa is... well, that's a wildcard.
But Australia has land. A LOT of land. So establishing closer military ties (also with the Philippines) affords freedom of dispersement.
Which in turn increases US retaliatory options in the case of escalation.
Which makes sudden escalation less likely, as China has less to gain from it.
Or, in other words, the Pacific is now Europe ~1960, with the US trying to establish a credible capability to surge into the region in the event of hostilities.