These regulations are very confusing in the way they are interpreted. I am not even convinced that CASA's interpretations always follow the actual regulations.
CAR 2(7) and CAR 206 are different things. CAR 2(7) defines private operations, i.e. what you can do with a PPL. CAR 206 defines operations that require an AOC. Totally different things.
In this case, CAR 2(7) is easy to satisfy. You don't have to satisfy ALL the conditions, so flying in the course of the personal transportation of the owner of the aircraft ticks the box as a private operation. No need to look at schedules, advertising or who pays what etc.
So why can't you advertise and sell tickets on a flight in the course of the personal transportation of the owner of the aircraft? It must be that CAR 206 also applies, regardless of whether CAR 2(7) classifies the flight as private. So you need to satisfy CAR 206. In this case I would suspect that 206(1)(b)(i) carriage of passengers or cargo for hire or reward and possibly 206(1)(b)(ii) carriage, in accordance with fixed schedules to and from fixed terminals, of passengers might be a problem.
I don't know the legal definition of "hire or reward". I suspect CASA don't actually use the usual legal definition, but I don't know whether their definition is actually recorded anywhere or whether it's just their opinion at the time.
Ultimately CASA's definition is really what matters, unless you are in court.