Just to play devil's advocate for a moment (but before I do, I just want to make it clear that if a buyer of mine claims an item is not received and I send a replacement, I will generally upgrade the package to a tracked service out of my own pocket - however, if the upgrade would cause more of a loss than refunding, then I would refund, uness there were extenuating circumstances).
If you look at it from the seller's perspective, though, they have a buyer claiming that an item wasn't received, who wants a replacement, and doesn't want the replacement sent by a tracked method. In reality, you don't want to have to pay for the tracking, which is understandable, but the situation could be reading very differently to the seller; especially because it appears you contacted the seller and asked for a replacment, rather than to look into the situation and see what could be done (red flag - I may have actually blocked you myself from this first message, if that's what you sent to the seller, and probably wouldn't have actually offered a replacement option at all) - untracked doesn't necessarily mean 100% untraceable, BTW, especially for international mail that has customs numbers and barcodes that are scanned / recorded as the package progresses (if you have a customs number, you can often contact Australia Post with it to ask them if it has landed in Aus, and they can usually confirm where it last was scanned if it has), you have to remember most people will react and respond based on information they know for sure themselves, and all of their past experiences in similar situations. If I were the seller, I would have been immediately suspicious, though still wouldn't have asked for money to send a replacement with an upgraded postage service.
I find it interesting that you say the seller is taking a gamble by sending untracked, but (presumably) you're not by wanting an untracked service, since this still gives fewer options to follow up in the event a package goes astray, and allows buyers such as yourself to presume lost and never going to arrive, rather than contact relevant postal services to do something about the package they haven't delivered yet.
There is nothing to report - you got a full refund, and the seller no longer wants to sell to you (as is their right). I certainly wouldn't have handled it quite like they did, I firmly believe a buyer should not pay any more than the original price to receive what they ordered if a replacement is being sent (unless they specifically want an upgraded service for the replacement, like SOD or express, or both), but in the way it was approached, I can also see potential for the seller to have had alarm bells ringing and want to handle this in perhaps a different way that they might otherwise.
