Princey Aydin, 42, is accused of throwing a bottle at an officer in a heated rally at Sydney Town Hall against Israeli President Isaac Herzog on February 9, which was attended by thousands.
The rally descended into violent clashes between protesters and police, who drew widespread condemnation for their use of force.
Officers arrested 27 people with 10 charged and before courts.
Footage of Aydin's arrest, with their door smashed down by riot police at 5am, has been lambasted as heavy-handed and excessive by human rights advocates and Greens MPs.
They were charged with resisting police, intimidating police without actual bodily harm, throwing a missile at police without actual bodily harm, and using indecent.
Defence lawyer Nick Hanna challenged the artist's bail conditions on Wednesday, arguing a ban from being within 300m of Town Hall was excessive.
Judge Michael Antrum agreed with his assessment and varied the artist's bail conditions.
Another pro-Palestine protester, 25-year-old Sienna Hopper, who faced the same judge at Downing Centre Local Court on Wednesday, was also allowed to enter the city freely.
"Our concern is endangering the safety of the community given her behaviour," the prosecutor said.
But the judge flatly dismissed those concerns.
"There's no basis to exclude Ms Hopper from the Sydney CBD area," Judge Antrum said.
"She has no criminal history, she's a young person … I don't feel these conditions were reasonable."
Mr Hanna said the geographic limits imposed by the bail conditions of protest-related prosecutions were a "worrying trend".
"It's difficult to identify any legitimate purpose of such bail conditions," he told AAP.
"They appear to be designed to prevent people from exercising their democratic right to protest."
An independent police probe has been launched investigating police actions at the rally, including incidents of alleged misconduct.
Among the most controversial incidents on February 9, police shoved and dragged a group of Muslim worshippers performing the sunset prayer.
Other demonstrators, including Greens MP Abigail Boyd, reported being punched and pepper-sprayed by authorities.
NSW Police Commissioner Mal Lanyon said no officers have been stood down due to alleged police brutality at the rally.
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