It's the sheer randomness of it that makes it so terrifying. The idea that the victim would be utterly generic: not a politician or a soldier, but a random person. This person would be an abstraction, really. They are everyone precisely because they are no one in particular. What would matter is the image. The video had to be made, the event had to be broadcast. This matters more than the killing itself.
Now will come the courtroom arguments about whether this is a serious plot or empty, youthful bravado, but they will have no public purchase. Terrorism is all about the fear, the anxiety, the outrage. It's nothing without it. And what can scare or outrage us more than the thought of ISIL within?
And it's that thought that perhaps has the most to teach us in Australia. ISIL is not simply a group to be vanquished. It is not a fixed, finite, collection of people we can somehow control or eradicate. For us in Australia, it's most dangerously a symbol: a brand a young man from Sydney can claim for himself; a flag in which he can wrap himself, and his proposed victim. For all its pretensions to statehood, the key thing is that it's anything but. It exists in the mind as much as on land.
So it's not the kind of thing we can simply destroy with military force. Modern terrorism doesn't work that way. We keep killing "senior figures" in terrorist groups – indeed, it's more than three years since we killed the most senior of them all – and nothing substantive changes. We tried to smash al-Qaeda. It fragmented, then morphed into a mass movement not truly under anyone's direct control, with Osama bin Laden mostly a symbolic figurehead. Then it begat ISIL.
This yields a devilish problem: namely, that we are trying to confront a threat that exists nowhere in particular, and anywhere in theory. We can't destroy that. Not in the short term and not with the kind of conventional force the state has at its disposal. What we can do is manage it. Arrest, prosecute, convict. The good news is, we're good at that. The bad news is that this isn't a cure. It's the (certainly necessary) treatment of symptoms.
Long-term, it's about us. It's about how resilient we are as a society, and how focused we are in our response. There is one very clear way in which this alleged plot can succeed, even if it is never carried out: that we become so emotionally manipulated, so provoked, that we end up helplessly polarised. That becomes a problem because a symbol as ghastly as ISIL can only prosper in a febrile atmosphere.
"Right now is a time for calm," urged NSW police commissioner Andrew Scipione. "We don't need to whip this up."
He's entirely right, but even as he says this he must be asking himself a very scary question: is that going to be possible?
Waleed Aly is a Fairfax columnist and a lecturer in politics at Monash University.