Rainwater BASIX requirements

Sure, exclude it from the laundry basix requirement.
It’s an option, not a requirement.

Or ,eave it and turn off the pump and don’t use the water for the house.

NSW BASIX deemed rainwater laundry use hasn't been compulsory for several years.

Have you signed the contract?

The general problem with using rainwater for laundry use has been the poor quality of the water delivered. If your rainwater harvesting system has been optioned and installed to Rainwater Harvesting Best Practice, using rainwater is better for your washing maching and clothes plus it gives year round utilisation of the harvested resource. I recommend having a separate rainwater tap fitted rather than plumbing to the existing cold water tap.

Unfortunately, the majority of rainwater harvesting systems are substandard.

If it is an automatic mains water switching device, yes.

The alternative manual system will have two valves you turn, one on and one off.

Manual systems are significantly cheaper and bullet proof but are rarely offered as an option. There is more to be made by fitting an automatic device.