Friends of Newcastle Ocean Baths says the revised stage two design is a major improvement, but two "red lines" remain unresolved.
The community group has backed City of Newcastle's decision to simplify the pavilion roof design and redistribute accessible and family facilities following Tuesday night's public briefing on the revised design.
But Friends of Newcastle Ocean Baths (FONOB) president Peter Wickham said the group remains concerned about the lack of a genuinely open-air roof section in the change rooms.
It also has misgivings about what it describes as "excessive commercialisation" of public space for the kiosk and cafe.
"We asked the council to rethink the proposal and it has," Mr Wickham said.
"There are significant improvements in what we saw at Tuesday night's public briefing, and those improvements should be acknowledged."
The previous wave-form roof design has been replaced with a simpler flat roof on the northern pavilion, with about a 1.4-metre gap on three sides.
The new proposed "floating" roof will be made of glass, and the council can adjust the opacity to suit areas where people need more privacy.
Mr Wickham said the flat roof design is "much more sympathetic" to the architecture and significance of the state-heritage-listed ocean baths, but said a "floating roof is still a roof".
"Language is important," he said.
"A light-filled change room is not an open-air change room, and a substantial commercial food and drink operation with dedicated patron space is not the modest swimmer-centred kiosk we have consistently advocated for.
"It doesn't provide direct sunlight, views of the sky and that wonderful sense of being outdoors, hearing the ocean and the sounds of people enjoying the baths."
FONOB's rival design, the Peter Shaddock Community Concept, retained a gap between the wall and roof offering open-air character to the change rooms.
Councillors and the community were told the estimated cost of the revised design is $43 million, including $14 million for contingencies or price hikes.
City of Newcastle chief executive Jeremy Bath said that figure excludes GST, which would be refunded in full to the council.
"It's about 18 months away before the detailed design and tendering documents are completed," Mr Bath said.
"In terms of that $43 million, we believe that is at the very upper-end of what the cost could be.
"We've been saving for this project for a number of years. This isn't a project that has snuck up on us."
Mr Bath said he expects half of the funds to come from developer contributions and the other half hopefully paid for with government grants.
Accessible and family facilities have been redistributed in the new design through the central and southern pavilions, a move FONOB believes will improve accessibility and future-proof the baths as the city's population grows.
Changes around the Canoe Pool and historic seawall were also welcomed, but FONOB maintains it will examine the amended development application carefully to ensure the Canoe Pool as a whole is protected.
Under the new plans, the controversial cafe and kiosk will remain although the space seems to have been somewhat reduced.
The size of the bookable community space has also shrunk to accommodate the revised design.
If the development application is approved, City of Newcastle expects to award a tender for construction in mid-2028.
Mr Wickham said the council needs to ensure the facade is protected and stabilised in the meantime, after structural investigations in 2020 recommended repair or significant maintenance recommended within 18 to 24 months.
"The revised design is a significant improvement and the council deserves credit for responding to many of the concerns that have been raised," Mr Wickham said.
"But improvement doesn't mean every issue has been resolved. Our test remains very simple: swimmers and bathers first."
The community was told it would be unlikely that the baths would be closed for construction works, but there may be some reductions in car parking when the time comes.
