Australia has (it seems) narrowed the plan to exile citizens with dual citizenship, by limiting it to those that actually fight for terrorist groups that Australia considers enemies.

It is legitimate to punish people for that, by imprisonment for instance, but taking away citizenship is the wrong way to punish any sort of crime. In addition, it can force people to go to a place where they will be tortured.

I also see a slippery slope here, in that if exile is tolerated in any kind of case, politicians will propose to extend it to other cases.

I don't think that exile would deter or prevent crimes more than imprisonment. Meanwhile, if some accused stay away from Australia to avoid being tried and imprisoned, that achieves the same effect as exiling them without the moral onus of imposing exile.