No it doesn't you can put any back on the road, the cat marker is only an advisory and legally means nothing. Has a drastic effect on the cars value though.

I'm not sure what happens now the vic scheme has gone, but when I was vic testing cat a and b cars had a more lengthy test.

The point of no return is a cod (certificate of destruction) marker which supposed to be issued as the car gets destroyed.
Once it has a cod marker that's it and there is no going back.
I heard about a rare Morgan, on one of the many vosa courses I did, that had somehow stayed alive with a cod marker and the guy who managed to get it painfully restored the car at massive expense only to be told it had to be destroyed when he tried to tax it, there was nothing at all he could do with the Id the car had.
Wounder lol