The 18-year-old was last seen at about 11pm on May 31, 2019, when he was ejected from the Cheeky Monkeys bar in town.
Police were alerted six days later, when he failed to return to his hostel and could not be found or contacted.
A large scale search was launched, with only a hat believed to belong to Theo located, and investigators have since been trying to track down the person who last spoke with the teen.
At an inquest into his disappearance on Thursday, counsel assisting the coroner James Herrington said a team had finally done that.
Fellow traveller Loic Spiess gave evidence via audio visual link that he and Theo had been communicating via WhatApp - an encrypted messaging app - in the days before he vanished in 2019.
The pair - who had met in January that year - talked about meeting up soon, before Theo was due to leave Australia and return to Belgium, and about Byron Bay.
Theo's last message to Loic was sent at 12:56am on June 1, just six minutes before his phone mysteriously stopped working.
Loic's reply at 3:23pm the next day was sent but not delivered.
"That is now the last message that we're aware of that Theo sent to someone prior to 1:02am when phone activity ceases," Mr Herrington told the inquest.
Loic was the last person to communicate with Theo and was also the last witness to appear at the inquest.
He spoke highly of his friend, telling the inquest Theo was a clever, kind and responsible.
He has no memory of the teen drinking excessively, taking drugs, or going for walks at night.
"I think he was very responsible usually," Loic said.
"And also I remember him being pretty physically fit as well."
The inquest earlier on Thursday heard evidence that places the teen on a steep headland below the town's famous lighthouse around midnight the day he disappeared.
Investigators have already aired evidence, gleaned from Google location data from his phone, showing Theo had spent seven minutes at a sporting field, before charting a route through the Arakwal National Park to the beach below the headland.
Telecommunications expert Professor Aruna Seneviratne analysed Theo's mobile phone data, finding it closely correlates with the Google data, but continues for an hour after the latter cut out.
It shows Theo's mobile connecting to two telephone towers several times between midnight and 1.02am on June 1, giving a snapshot of its location at those points in time.
The data is accurate with an error margin of 78 metres, Prof Seneviratne said.
He told the inquest he is "highly confident" it showed the phone moving away from the telephone tower and up the headland towards the lighthouse.
A police officer completed the climb from the beach, up the headland and to the lighthouse with a phone similar to Theo's to provide another point of reference.
That phone connected to the same towers as Theo's had, and the location data was very similar to that of Theo's phone.
However, the exercise also enabled Prof Seneviratne to conclude "with a high degree of confidence" that Theo's phone never reached the lighthouse.
The phone then stops transmitting data after 1.02am, before coming back online between 6.17am and 1.47pm, but Prof Seneviratne says the data from that period is weak and not as reliable.
Prof Seneviratne said he could not determine why the phone stopped transmitting for five hours.
The data does indicate, however, that Theo's phone did not end up in the ocean, as it wouldn't have kept transmitting, he said.
The current police theory is that Theo clambered up the beachside cliffs, dropped his phone, then fell and was swept out to sea, something his family says goes against the teen's sensible, risk-averse nature.
Counsel assisting the coroner and lawyers representing the police and the Hayez family will make submissions before State Coroner Teresa O'Sullivan makes her findings.
Police this week also announced a $500,000 reward is on offer for information in his case.
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