Folau was initially banned after a hearing by a panel chaired by Shao Wang (Singapore), Val Toma (Romania) and Eroni Clarke (NZ) but World Rugby did not release details of how they came to their conclusion.
Earlier, Waratahs coach Daryl Gibson had warned the outcome raised issues for the aerial contest in rugby and the rules might need to be changed if Folau was banned.
Some critics have suggested Ireland were at fault for a precarious one-man lift on O'Mahony provided by teammate CJ Stander.
Wallabies flanker Ned Hanigan on Thursday predicted the Folau appeal finding would set a precedent involving actions after contesting the ball.
"I think the issue with Israel is people are seeing a bit differently just because it's that grey area," Hanigan told Rugby.com.au.
"I think if you've got a bloke who's genuinely not able to catch the ball and flying into a one-man lift, that's obviously what we don't want in our game, it's a safety reason.
"But if you've got a genuine contest and things do go wrong, so that's where the onus would come in on the lifter."
"I think the issue is he (Folau) is genuinely going for the ball and it's the actions that he does when he's coming back to the ground...
"I honestly reckon it'll be a bit of a milestone or precedent to what will come in the future, with these types of issues."