UPDATE 28/03/2017 4.28pm: Funny story: it turns out the reason Outlast 2 was rejected by the Australian Classification Board in the first place was because the developer submitted the wrong video.
The developer explained in a statement to Eurogamer that it had actually sent an earlier build of the game that contained a video not intended to be included in the final release. Here's the statement in full:
The original submission of Outlast 2 sent to the Australian Classification Branch contained the final game code and a video file for reference taken from an Alpha version of the game. This video file should not have been sent along with the game code, as its content was not representative of the final game.
In the second submission, the same game code was submitted with a video file reflecting the final game content. The game was then approved for release with an R18+ rating. There will be only one version of Outlast 2 available worldwide.
ORIGINAL STORY 24/03/2017 12.17am: Last week we reported that Outlast 2 would be banned from sale in Australia, as the country's ratings board deemed the game's "implied sexual violence" too upsetting for even its most mature rating, R18+.
But now, upon further analysis, the Australian Classification Board has changed its mind and the game is listed with an R18+ rating.
In the new listing Outlast 2 rates as "high impact" (the most mature level) for sex, violence and "themes". It's only "strong impact" for language and nudity, however. And drug use is merely rated as a "moderate impact".
Developer Red Barrels issued a statement to Press Start clarifying that the game was not altered in any way to achieve this rating.
"Outlast 2 has been rated R18+ by the Classification Branch in Australia and will be released 26th April 2017. There will be only one version of Outlast 2 available worldwide," the studio said.
Outside of Australia, the game will launch one day earlier on 25th April for PS4, Xbox One, and PC.