NSW
That is why 20 minutes down the road you are not allowed to have a hand controller in the cabin.
and you just said it passed with the powerfc. It is not illegal to modify your car to meet epa test requirements, for example by reprogramming an ecu for better efficiency.
Nothing is ever fixed tune, since you can fiddle with the engine timing sensors, change the tune chip in the ecu, change the fuel pump, put a better air filter panel in etc. etc. but these are fixed changes, meaning they are fixed for the next time you drive it.
Regarding your insurance, the reason they say they will cover it if it is legal is that they are legal but don't set it up in an illegal way. The ecu will not cause an accident if it is not being fiddled with while you are driving, the best way to avoid being accused of fiddling is not to have it in the cabin. Most insurance companies recognise that provided the car is roadworthy - it is not the car, it is the driver. The roadworthy test doesn't care if your engine is out of tune, it cares about safety check ie. if your brakes, lights and visual systems are in working order, and even if a fault in these was the cause of an accident but you passed the roadworthy check the insurance company cannot refuse to pay you, eg. the brakes failed.
The only way the insurance company can refuse to pay is to prove you knew the brakes or whatever safety component was not operating and still continued to drive. The in cabin controllers give them an opportunity to try to prove you knew the car was not running safely since you were fiddling with the engine in cabin while driving which is an unsafe practise, since you ought to know that doing this may cause you to accidently overpower the brakes that then caused the accident.
It is by extension that the programming in cabin is thus illegal, just as it is illegal to have a radar detector in your car even if you are not using it: If it is in a location that you can use it while driving you will find it is illegal.