This is my theory:
As Jamberoo has stated, their attendance is declining & they do not expect this new investment to significantly increase attendance permanently. I'd say this is due to the 'water park' model reaching market saturation hence the lack of investment at major water parks in recent years. Water parks are not as in demand as before as they are too many of them. Kangaroo Island was proposed about a decade ago to handle additional capacity and this recent announcement is not about adding additional capacity. This recent announcement is about a shift from an 'expansion' strategy to a 'rejuvenation' strategy. They are replacing their current attractions with more modern versions of them (see dot points below). They are moving with the times. The Alpine Coaster though could also be a reaction to the 'water park' saturation by shifting back to regular dry ride/attraction investment.
Bobsled > Alpine Coaster
Splash Out body slides > 2 SkyBox Multi-Bump Speed Slides
Surf Hill > 8-Lane Octokraken Racer
Splash Out pools > Koala Kove
Koala Kove also features mushrooms (though not as large as the ones at The Rock). It may be that Koala Kove is also a replacement for the mushroom pool area of The Rock. This could indicate The Rock may be up for redevelopment but The Rock area is a pretty unique part of Jamberoo (probably either it's most or 2nd most well known attraction even if it is not just as popular as the Bobsleds) and it fits in with the soon to be added gorge theming in it's neighbouring site so I doubt they would remove it completely - maybe an upgrade involving a reduction down to only the jump area soon & maybe that will also be the final water ride upgrade of Jamberoo? Upgrades for the rest of the water rides (apart from the ones mentioned below) are either too soon, too costly or not needed.
If my 'rejuvenate instead of expansion' theory is correct, this could mean Billabong Beach can be made redundant by the already operating Banjo's Billabong and/or the future Koala Kove while Rapid River can be made redundant with the proposed Platypus River, which should be the next ride built after Grand Gorge Falls/Koala Kove. Platypus River is featured (but not mentioned) on the plans above so they are still thinking about implementing it. Platypus River was initially just to accompany Rapid River in the park but to service the Kangaroo Island area with it's additional capacity. Clearly, that role is currently not needed as the attendance is not high enough.
With water park market saturation & with Surf Hill's future now in question, this makes the whole Rapid River/Billabong Beach/Surf Hill area most likely redundant with replacements built elsewhere in the park possibly by summer 2021. Maybe Jamberoo are planning to remove this area in the future then?
However, upgrading rides alone won't increase attendance - a point of difference does. Grand Gorge Falls, whilst having some similarity to Surf Hill, I think does this with it's grand scale & theming. If completed in summer 2020, it will be Jamberoo's most significant investment to date regardless of price tag/ride type. I mean, look how large it is! Look how well themed it is! If you know the size of Splash Out, well you know how large this is going to be. It will be larger than what it seems to look in the artist impressions (most accurate to give you a sense of it's size is probably the 'View From South' impression). It will be towering. I feel Jamberoo may underestimate how great this investment will be. It may increase attendance on the theming alone. And that will send a big message if that happened! Kangaroo Island's theming hasn't come to full fruition yet (though I expect it will mostly when Platypus River is built) but Grand Gorge Falls' theming, if approved & built on time, will be and I'm confident it will be one of the most aesthetic water park rides in Australia (though they are not many to choose from). Theming wins big here.
This is the opposite of the problem with The Perfect Storm, which, whilst having unique & brilliant narratives/theming, had it's colour scheme nearly identical to Funnel Web, which is located right next to it. Worse than that, it was the next major attraction after Funnel Web to open. They looked too alike & too soon. Grand Gorge Falls & Surf Hill won't get mixed up with their contrasting theming & near 20 year gap between opening dates and we all know which of the two will capture the public's imagination from now on.
Remember, this is only a theory. It may be completely incorrect.
I think the tunnel will remain - it just will not have a slide on it if Surf Hill is removed. You can see in this photo that Surf Hill & the tunnel are separate particularly since they need piping for the tunnel's waterfall. However, as stated above, maybe they plan to remove Rapid River too and shift it to the proposed Platypus River?