Not to minimize the threats to koala populations (which are very serious and significant), but exactly how can a population of 80,000 be considered functionally extinct?
I don't think they know what functionally extinct means. Their press release is here (the article linked above is a basic rewording of it): https://www.savethekoala.com/sites/savethekoala.com/files/uploads/AKF_press_release_10_may_2019.pdf
Reading the article they indeed do not seem to understand what functionally extinct is, at least they present no ecological evidence to dupport it... It is better to read what the IUCN red list has to tell than copying the text of a very specific lobby group
The way I understand it, they are saying that in certain areas the Koalas are now absent and therefore are not part of the ecosystem any more, and that means they are no longer a functioning part of that ecosystem (so, "functionally extinct in the Australian landscape" or whatever their phrasing was). That isn't what functionally extinct means of course, but I think that's what they are trying to say. I also think it is deliberate on their part to create a more scaremongering atmosphere to further their cause.
And lets be honest, its a valid cause. Unfortunately the word "endangered" has completely lost its impact. So common is its usage that it has almost has become a default prefix for the word "animal". Almost as if its synonymous with the word "exotic". I hate misinformation, but at least the article does state their definition of the term. Most people don't understand the accepted interpretation anyways.