Internally, your rank is what primarily matters - however, the gap between the ranks is also important and that is determined by marks.
Your performance in your HSC will constitute an aligned examination mark (that is, your external mark is a reflection of a raw exam mark that is aligned).
Thus, this is why your HSC mark is 50/50 - it's an average of your internal assessment mark and your external examination mark. However, your internal assessment mark is determined by the pool of external marks that your cohort attains (not the actual marks you attained in school).
If a student were coming internally 1st in a school (with let's say a 40% average cause the school sets insane exams) and the highest external exam mark in their cohort is 99 then they'll receive 99 as their internal assessment mark and keep their own external exam mark (this may be the 99 or something else). Average those 2 and they'll get a certain HSC mark - see how they didn't get bloody only 40 for their internal assessment mark which is 50% of the calculation of their HSC mark for a subject?
The above video is a good explanation if you can understand it. Otherwise, hopefully you somewhat understand my summary.