Thousands of people were evacuated from Forrest Place in Perth's city centre on January 26 after an object containing volatile chemicals, nails and metal ball bearings was found.
The device did not detonate despite a fuse allegedly being lit, and the incident was later declared an act of terror - the first in Western Australia's history.
"I saw what appeared to be a child's toy land in front of me," Renae Isaacs-Guthridge told a federal inquiry into racism in Australia on Monday.
"I didn't know, obviously, that it was a sock-filled explosive device built for carnage."
A bystander approached a police officer in the crowd and attempted to alert him to the device.
"He brushed her off, didn't take her seriously and essentially just ignored her," Ms Isaacs-Guthridge said.
"He was complacent."
Members of the public continued to raise concerns about the object, and police evacuated the crowd 40 minutes later, she said.
"It took that long to get us out of the area and actually to recognise the seriousness of it," Ms Isaacs-Guthridge said.
Once police had responded to the device, officers did not share enough information about what was happening.
Some in the crowd believed it was a joke or an attempt to shut down the protest.
Ms Isaacs-Guthridge was scathing of the lack of action from community leaders and politicians that followed the incident, and its declaration as an act of terrorism.
"Silence," she said.
"There was obviously a distinct pattern of people who said absolutely nothing."
The nation's overwhelming response to the murderous Bondi terror attack a month earlier highlighted the poor response to the January 26 incident, Ms Isaacs-Guthridge said.
"I understand no one died (in Perth). I get that, but (if the device had detonated as intended) I shouldn't be sitting here and talking to you today," she said.
"I and my girls and mum and my sister, we should be dead because it landed right in front of us.
"That was the intent."
Ms Isaacs-Guthridge called for a consistent response to incidents, regardless of the race of the intended victims.
"Because we were an Aboriginal and Torres Strait Islander crowd, there is an underlying hate against us, and so we're not taken as seriously," she said.
"We are just not as important."
Incidents of racism, hate and violence directed at Aboriginal and Torres Strait Islander people in Australia were not random, Dr Isaacs-Guthridge said.
"It's structured, it's funded and it's politically enabled."
"I would argue that we're still in the frontier wars."
Perth man Liam Hall has been charged with engaging in a terrorist act over the incident.
Police will allege the incident was a nationalist and racially motivated attack targeting First Nations people at the protest.
Hall was self-radicalised and acted alone, police previously said.
Police have previously defended taking nine days to declare the incident a terrorist act, saying investigators needed to gather evidence.