My modem died, and after trying the usual resets, I unplugged it and took it to a Telstra shop. Death was confirmed, and I bought a new one. Well, sort of ‘bought’. It was free, but it came with a booster, which was $288, to be paid off over two years on my monthly bills. I don’t really need the booster; I may use it now that I have it, but I wouldn’t have bought it otherwise. I was happy to get the system working again, but the sales process annoyed me.
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Nothing is free. Looks like a sales pitch to think a customer is getting something for free, when it is most likely the customer has actually paid for it (and then some).
Payment will be through being a Telstra customer (which generally has higher NBN plans than many competitors) for 24 months until the payment plan has expired. An easy way to lock a customer to Telstra for 24 months.
Telstra also make it hard to cancel the Booster offer. The guarantee is an interesting read, as it is about reducing the likelihood of the booster isn’t returned.
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It is an interesting sales tactic. In reality by their advertising you bought a booster for $288 and got the modem free. The ‘booster’ and ‘smart modem’ are collectively a WiFi mesh system.
FWIW NBN modems are generally in the range of $100-$400 so your $288 cost might not be a bargain but is not too much out of line. Their goal, as @phb mentioned, is to tie you into staying a customer for their high priced plans.
Some might interpret that as service 
Telstra sells their ‘Smart Modem 3’ for $288 as a standalone product on outright or multi-year payment plans, same outcome for them to tie customers to them.
The ‘Smart Modem’ is essentially a mesh system controller node and the booster is 1 ‘client’.
$288 all up regardless of what came free with what is not out of line, excepting you did not need it. You could as easily have paid that or more going into a JB or Officeworks and buying a good quality name branded product.
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Convenience is Telstra along with others such as TPG/iiNet preconfigured their store supplier modem/router products. There are various reasons offered including facilitating remote management access as well as simplifying initial connection. For customers not interest in becoming more acquainted with the technology it is supposed to deliver a more consumer friendly and stress free experience.
One intended or unintended consequence is if one chooses to change NBN provider. While the modem/router provided may be a common retail brand product the firmware is likely customised to create a version unique to your NBN service provider. Having paid outright or overtime one might expect it to be able to be used with your next choice of NBN RSP. Be aware it may be unable to be used as expected.
‘Can I Use My Own Modem With A New Internet Plan? | Canstar Blue
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I have given up with Telstra wifi routers ( not the NBN modem). Over several years I have had 3 fail to give reliable wifi. Like you I was offered, and accepted, a “free” router if I bought a booster but that router also became unreliable.
So I bought a D-Link router from Officeworks and run my home wifi and ethernet from it. That includes the Telstra booster located downstairs, but it had to be connected by ethernet as the wifi signal from upstairs was weak (and would have degraded the upstairs wifi performance).
The Telstra router is still first in line from the modem as it is needed for the NBN connection and phone line. But it has wifi disabled and its only ethernet output is to the Di-Link WAN port. I hope it lasts for a few years in this configuration before failing!
The frustrating thing has been that the wifi failures were intermittent so didn’t show up when (after what seemed like hours on the phone) the Telstra chatline person conducted diagnostic tests. So they would not agree that the router was defective.
BTW - I have a similar issue with the NBN junction box on a pole in our street. Sometimes when it rains the NBN drops out. But when they test the connection later they cannot find a problem. I gave up complying with requests to restart modems and routers as I knew exactly what the problem was. A technician did a temporary fix several years ago but warned me that the junction box needed replacing.
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