Impacted by minor issue, trying to understand 1948 eligibility

Hi everyone. I submitted a JS application in Australia in September last year (applying through my father’s side) and was told all was in order and I could expect to be approved within 2 years, however I recently learned about the minor issue and understand my application will be denied as a result. I’m now trying to understand my eligibility for a 1948 case through my mother’s side. I’ve read the wiki, but I’m a bit confused and grateful for this group’s collective wisdom!

My GF-GM-M were all born in Italy. My GF emigrated to Australia in 1952 to find work and set up the family home, and my GM and M came over to Australia in 1954, a year after my mother was born.

My GF naturalised in the late 1950s, when my mother was 5 years old. My GM and M never voluntarily naturalised, but became Australian citizens automatically due to my GF’s naturalisation.

Wondering if I have a case through the courts, or has the minor issue thwarted my chances on both my father’s and mother’s sides?! Thank you in advance for your advice.