i know someone who claims his citizenship has been put on hold for this issue. Frankly speaking i cant believe him as he does not give much details as to what DIBP has told him. He just says they dont let him do the test. The other day, I inquired the same from 4 different states by email and was told that it wont have any implications on citizenship or RRV applications. They all said you can live any where in Australia. Called DIBP twice and was told it has nothing to do with citizenship application and as long as you satisfy residence requirements you are elligible to apply. Have two close friends who were on student visa and got sponsorship from WA and never put feet on WA and had their citizenship applications approved recently. In my opinion if DIBP gas any problem with this issue, they can simply put a condition on 190 visa to restrict people from moving state.