Flight MH128, bound for Kuala Lumpur, returned to Melbourne on Wednesday after passenger Manodh Marks tried to enter the cockpit, police allege.
Authorities said the Sri Lankan man was revealed not to be carrying explosives and it was not a terrorism incident.
He felt "vulnerable" in custody and needed medical help, a court heard.
Mr Marks, who has been living in Australia on student visa, is accused of endangering the safety of an aircraft and making threats or false statements.
He had requested to see a mental health nurse and held concerns for his safety due to his "age and appearance", the Melbourne Magistrates' Court heard on Thursday.
ictoria Police said the device he was carrying was a "speaker-type" object, not an explosive.
Witnesses have described how passengers tackled the suspect and "immobilised him" after he allegedly made a bomb threat.
Meanwhile, authorities were under pressure to explain the time it took for armed police to board the plane and arrest Mr Marks after it landed at Melbourne airport.
According to local media, the 337 passengers and crew were forced to wait for up to 90 minutes.
Victoria Police Chief Commissioner Graham Ashton said police had initially treated the situation as a possible terrorism incident, before deciding it was "a case involving a mental health issue".
"I certainly appreciate when you are on a plane in that situation one minute could seem like an hour," he said.
"The objective in any serious incident like this is to get every member of the crew, every passenger off the plane safely, and that is what was able to be achieved."
Police said that Mr Marks was released from a psychiatric facility on the day of the incident.
He did not apply for bail.