Daniel Keneally, 25, was convicted of fabricating evidence in November and is due to learn his punishment in Sydney's Downing Centre Local Court on Thursday.
Defence lawyer Paul McGirr told Magistrate Rodney Brender the threshold had "only just" been crossed for Keneally to be sentenced to imprisonment but asked for an intensive corrections order that would allow him to stay out of jail.
The order functions like a suspended sentence and involves supervision while offenders are in the community to ensure they comply with any conditions.
Mr McGirr told the court he believed there was agreement on the availability of the order, but the prosecutor said they would instead seek a term of full-time imprisonment in custody.
"I have verballed my friend," Mr McGirr said.
The magistrate is considering material from the lawyers before sentencing Keneally on Thursday afternoon.
Keneally wrote a statement containing numerous falsehoods relating to a phone call from Luke Brett Moore to Newtown police station in February 2021.
The statement, including claims Mr Moore wanted to kill a police officer, resulted in the activist being arrested and held in custody for three weeks.
The founder of ISuepolice was later released on bail and the charge dropped due to a recording of the conversation made on his phone.
Taken without Keneally's knowledge, the recording showed significant discrepancies from the officer's statement.
Mr Brender rejected Keneally's claims that he had made an honest mistake, convicting the 25-year-old in November.
"There is no basis to suggest any other person suggested the content or affected (Keneally's) memory," the magistrate said at the time.
An investigation by the Law Enforcement Conduct Commission led to Keneally's charge in October 2022.
The police watchdog said it will provide a report to the NSW parliament when the criminal proceedings are concluded.
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