(For perspective, we have a shack on yingina/Great Lake. Other than a few signs around our corner of the lake, I've heard/seen/read virtually zero about all this until now.)
I suspect a lot of the current opposition - other than the usual kneejerk NIMBYism you get anywhere - is down to fears that somehow the area will end up like Derby or Maydena, and become completely swamped by MTBers and redefined by their needs/whims. And, subject to their behaviour which in a minority of cases isn't always gracious, respectful or appreciated by locals who were perfectly happy with their sleepy little backwater town as it was.
Putting aside the fact Great Lake isn't a singular town but a dozen-plus shack communities spread over a pretty huge area, I'm not really sure how a mostly flat lakeside track would appeal to that MTBer demographic, honestly.
Actually, I'm not really sure who it appeals to. eBike riders who appreciate flat expanses of water, eroded yellow-brown rock and the occasional patch of dry sclerophyll eucalypt forest? Seems like a limited market

The entire lake foreshore (save the dam walls) is perfectly walkable 99.9% of the time and there's no lack of old tracks about everywhere either. Plenty of people (presumably locals/shack owners) walk there and use them to launch boats already. As such I dare say privacy concerns might be a tad overblown though I'll reserve comment until seeing accurate plans as to where the track actually would go.
Admittedly there are some nicer patches of forest a track could weave through to make it sorta interesting (though a lot got burnt in 2019) but let's be honest, when people think of Tasmanian alpine scenery, they're not thinking about a large hydro-affected lake. Tasmania would certainly benefit from another novice-friendly multiday hike which I guess this *could be* but again, a 3-day lakeside wander isn't what the vast majority of people want to do. And it seems impossible to do such things these days just with simple, cleared tent sites, a couple of timber bench and a toilet. It's gotta be million-dollar bushfire resilient huts and the like...
I could think of worse places to do long runs on in summer, and perhaps the track would hold enough snow to make for a semi-interesting cross country ski route in winter, but I'm struggling to see the appeal of such a development. Let alone the economics to pay for it.