Just came across this and think it is a case of PV not knowing their own policy and how the relationship between Owner and Occupier is supposed to work...
As far as I understand it (& I do have some knowledge of Liability Insurance), is;
a) Liability for volunteers - while participating in Club Organised Events - are covered by the Clubs Insurance,
b) Liability for the features they build, that both comply with any direction given by PV (IMBA Standards) and fall within the delegated responsibility of the club (ie. being built in areas where you're allowed to build), would be covered by Parks Vic. This is an activity that have formally approved (ie. they have accepted the risks that go with such an activity on their land), they are the owner, these "features" become part of the park, so they have liability whether they like it or not...
Not too complicated I would have thought. They haven't by any chance just got a new person responsible for "Risk/Insurance" who doesn't know what they're talking about?...
Stand to be corrected, but I would have thought from both club and PV perspective the simple answer would be to have a "formalised induction" at these sorts of events, where voluteers that come are "registered" as having completed such, and hence become formal voluteers of either the club, or PV.
Not sure who you're dealing with, but I do have some contacts at VMIA - State Government's Insurer for major claims (>$100k I beleive) - that may be able to help them understand what the answer is...