Mastercard does not have that information. Mastercard doesn't do the billing. The bank does the billing.
Mastercard does not know the location where a given card holder is (or for that matter, any demographic information about the card holder). They know where the merchant is, but that's less useful for digital goods.
Per section 7 here — https://www.mastercard.us/content/dam/public/mastercardcom/n... — MasterCard could simply remove Australia from Itch’s Area of Use, at which point they would not be permitted to accepted MasterCard from Australian customers, which the merchant could trivially enforce by country filter on the billing address.
I suspect we’re going to find out that Stripe is unwilling to risk losing Mastercard in Australia and also unwilling to implement passthrough AoU restrictions to their sublicensees, and Mastercard isn’t willing to act against any single customer of Stripe or else they don’t profit from the “not our problem” discount rate they issue Stripe to make it their problem.