"He seemed like he was losing his co-ordination and balance because he was swaying a little bit," Shannon Mackie told the inquest into the teenager's disappearance on Thursday.

While he was confident about his assessment, Mr Mackie agreed he could have been mistaken but preferred to err on the side of caution to abide by NSW's strict liquor laws.

The 18-year-old traveller went missing after being ejected from the Cheeky Monkey's bar at 11pm on May 31, 2019.

Google data shows Theo looked up the route back to his hostel but for unknown reasons walked in the opposite direction.

Police believe he eventually tried to climb some beachside cliffs, perhaps to reach the famous lighthouse, fell, and was washed away.

But his family say the cautious teenager would not have gone alone through a dark and difficult bushland track to reach the beach.

Mr Mackie testified to having some years experience in observing patrons to assess whether they were intoxicated or approaching that state.

The bar's policy was to remove people in the latter category, as NSW liquor laws required there be no intoxicated patrons on the premises.

His memory of the night was vague so he relied on his police statements which described Theo has being moderately intoxicated.

He saw Theo walk from the toilets when he appeared to be losing his co-ordination and balance, approaching him after watching him for another five minutes.

As per the bar's "code green" policy, he asked Theo for his identification and he pulled out a Belgian driver's licence from his wallet in his jeans.

He agreed if the teenager had had any difficulty doing this it would have been in his police statement, which it was not. Neither was there mention of Theo smelling of alcohol.

The guard took him outside where he told him he was approaching intoxication and would not be allowed back in.

"He said OK" and was "compliant, quiet and showed no signs of aggression".

Sometimes patrons are re-assessed outside, but Theo had not protested as some sober people did who were allowed back in.

Mr Mackie was shown CCTV footage of Theo inside the club and agreed he couldn't see anything untoward, but said he was confident of his assessment.

Both Mr Mackie and the bar's security manager, Bradley Hill, said there was no policy to eject a certain number of people per hour or per night.

Neither was there a policy to eject men to allow more women into the bar.

They had never heard of anything adverse, such as an assault, occurring to someone who had been ejected and both considered the area to be safe.

At the time, a new liquor licensing sergeant had come to the area.

Mr Hill said he reminded staff to be vigilant due to penalties applicable to having intoxicated people on the premises.

While people approaching intoxication were not banned, one more drink would put them over the line and ejecting them prevented stress on the venue.

The inquest continues.

Australian Associated Press