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Presumably one realizes their mistake the moment they touch the leaves, long before they can reach around. So really you could tell anything to an unsuspecting victim just to get them to touch it. The "toilet paper" spin might be there to give the tale a humorous effect.

For context, there is a completely different plant affectionately known as "bushman's toilet paper" (an example: https://en.wikipedia.org/wiki/Brachyglottis_repanda). It grows more or less in the same places as the Gympie Gympie (the plant referred to in this article).

An easy mistake to make, and a very, very dangerous one.

From what I've heard, the locals didn't trick them. One captain apparently had to do his business in the bush and used the leaves to clean himself. He was just unaware.