Jacob Hersant, 25, is the first person charged with the offence in Victoria, accused of performing the salute in public six days after it became a criminal offence in the state.
He entered a not guilty plea on Monday as his contested hearing started in Melbourne Magistrates Court.
A video played to the court allegedly shows Hersant performing the salute in front of journalists and camera crews outside the Victorian County Court in October 2023.
He's then captured saying, "nearly did it - it's illegal now", and, "Australia for the white man, heil Hitler", before walking away.
Hersant claims he did not perform the salute and even if he did, the charge is constitutionally invalid as the gesture was a legitimate form of political expression.
Political science expert Professor Katharine Gelber told the court the salute was a form of hate speech that had extremely harmful effects on all minority groups.
Under cross-examination, she stated that different people might react to situations differently but hate speech causes harm systemically and collectively.
Prof Gelber maintained hate speech, including the Nazi salute, should be regulated by government.
Hersant's lawyer Timothy Smartt suggested she had let her personal views against Nazism cloud her professional opinion, which she denied.
In the course of Prof Gelber's evidence, Mr Smartt conceded it was "obvious" his client held far-right views and he would not be making any submissions that Hersant protested Nazism.
But Mr Smartt submitted that all minorities could not be affected in a particular way or have the same reaction to the Nazi salute.
The hearing before Magistrate Brett Sonnet will continue on Tuesday.
