As of February, 12 Australian dual citizens had lost their citizenship since the end of 2015, officials from Home Affairs and Foreign Affairs told a parliamentary inquiry into the laws.

Among them is Neil Prakash, serving a prison sentence in Turkey. Officials remained vague about what happens when his jail term ends, with Australia claiming he also has Fijian citizenship but Fiji rejecting the claim.

Labor parliamentarians quizzed Home Affairs first assistant secretary for counter terrorism Derek Bopping over the measures that leave Australian terrorists "on the loose" overseas rather than locking them up in Australia.

Mike Kelly asked whether it would be better for each country to "grab hold of these buggers and secure them".

"When the citizenship of Osama Bin Laden was revoked he ended up in Afghanistan. He raised a brigade ... the US response was to try and use cruise missiles; didn't kill him, he kept on going on his merry way," Dr Kelly said.

"Is it more practical to retain an individual like that under your control domestically where you've got continuing detention orders and you can effectively lock them up and throw away the key until they're safe?"

Dr Bopping said in some cases extradition would still be sought.

"What's the point of that?" Dr Kelly countered. "What's the point of catch and release, send them overseas and then try and extradite them back again? This is ridiculous."

Dr Bopping said the legal threshold to keep someone in ongoing detention was high.

"I'm not an expert in the adjudication of continuing detention orders," Dr Bopping said. "But those who may not meet the threshold for a CDO may still nonetheless present threat."

"I think that's spurious," Dr Kelly responded. "If they are a threat then they will fall within the CDO regime because you're talking about a physical threat to Australians. So I just reject that entirely."

Officials will not say how many of the people stripped of citizenship are in Australia and how many overseas.

Asked what happens to those in Australia if their secondary citizenship country refuses to take them, Dr Bopping said they would be removed to a third country where they had a right of residence, or kept in immigration detention.

Asked whether that meant they could be in immigration detention forever, Home Affairs general counsel Philippa De Veau said "you wouldn't want that to happen."

In the case of Mr Prakash, Ms De Veau refused to publicly disclose what discussions Australia had had with Fiji but maintained Australia believed him a citizen of Fiji.

"The government of Fiji has said that he's not a citizen of Fiji and never was," Labor MP Mark Dreyfus said.

"They have said that publicly, yes," she responded, without elaborating.

Mr Dreyfus said: "This man has spread vile ISIL propaganda. He's responsible for the deaths of dozens of young Australians who he lured to Syria. And he's going to be possibly on the loose. We know he's dangerous, we know he's killed Australians, but in five years' time when his sentence comes to an end in Turkey, what might happen?"

Foreign Affairs chief legal officer James Larsen said it would depend on the outcome of Australia's extradition request.

"You can have a range of interesting hypothetical factoids which you can explore, but ... no official at this table is in a position to provide a hypothetical explanation for possibilities concerning facts which have not occurred," he said.

Mark Dreyfus said 340,000 Australians visited Fiji every year.

"Would Australians be safer if Mr Prakash were in an Australian prison cell or on a Fijian beach?" he asked, a question that Mr Bopping declined to answer as hypothetical.

Mr Bopping began by telling the inquiry that Australian citizenship was "a privilege" that came with responsibilities including a "duty of allegiance to Australia".

The description got him into hot water with politicians from both sides.

Despite Dr Bopping attempting to downplay the remark, saying he had meant "small p privilege" in the sense that the common person would use it, Liberal MP Tim Wilson said the comment was "incredibly disturbing".

"The idea that Australian citizens don't have a natural right to their citizenship, if the department is now taking the view that Australian citizenship is a privilege, it says something frankly quite concerning about how they see this legislation and its purpose," Mr Wilson said.

Labor's Mr Dreyfus was similarly scathing: "Really? Is that a serious submission that you are making this to committee ... that Australians don't see their citizenship as a right but a privilege? Are you serious, Dr Bopping?"