I'm really not well versed in what the line between free speech and harassment is (and other "no go" zones).
That's what Section 18C is intended to try and clarify. Probably the most notable case of a prosecution involving Section 18C was against Andrew Bolt, a right-wing commentator who made disparaging comments about indigenous Australians. But he was actually charged with libel because what he printed was demonstrated to be factually incorrect; Section 18C came into play because it amounted to harassment.
I think that Leyonhjelm may be incredibly valuable in challenging mindsets - it would be a damn shame if he indeed was not practicing what he preaches.
The Chaser do have a reputation for political stunts. Most of the time, it's harmless stuff, like sneaking toy boats into the immigration minister's campaign headquarters (despite his claims of having stopped the boats) or asking a politician a series of silly question (eg, "Minister, what is your favourite ABBA song?"). But sometimes, they really push the envelope in terms of acceptability.
This stunt was a response to Leyjonhelm's comments on Wicked Camper Vans. Wicked is a company who lease camper vans painted with graffiti, but they had been at the centre of some controversy because a lot of their vans were covered in some pretty lewd slogans (eg "inside every little princess there is a slut wanting to try it just once"). Domestic violence and violence against women have been pretty topical issues in Australia - particularly in light of the Jill Meagher, Allison Baden-Clay and Stephanie Smith cases - and so Wicked earned the ire of local councils who felt that their vans were in poor taste at best, borderline misogynistic at worst, and generally making light of a pretty sensitive issue.
Leyjonhelm defended Wicked, saying that they should be allowed to paint their vans however they liked because of free speech. So The Chaser re-painted a camper van, making the lewd comments to be about Leyjonhelm (eg "inside David Leyjonhelm there is a slut wanting to try it just once") and presented it to him, looking to see his reaction. Probably most significantly, the camper van was presented to him by two of The Chaser's female members, Kirsten Drysdale and Zoë Norton Lodge, who themselves had been critical of Wicked. The whole stunt was to point out Leyjonhelm's double standards, which is exactly what they did.