I received a 99.5 ATAR, so I suppose this is my two cents on this situation.
First of all, realistically speaking, unless you go to a highly ranked selective school, getting average or below average for Task 1 in all of your subjects drastically reduces your chances at getting a 99+ ATAR. I know there are a lot of "success" stories of people failing their Task 1's and then somehow getting a 99.95, but this is probably because they go to a top-ranked school where the school average is a lot above the state's average, or they somehow get the motivation and discipline to work hard and rank in the top 5 for the rest of their assessments.
Personally, I think that the second option is really hard to achieve, especially taking into account the "mental obstacle" that you also have to overcome from not performing as expected in your first task. Again, if I'm being honest, the 99+ achievers in my school at least stayed relatively consistent throughout most of their assessment tasks (decent margin above average), and then absolutely popped off (ranked top 5) for one or two tasks.
I'm aware that this advice may seem really pessimistic or whatever, but I think it's good for you to know. I know a lot of my friends who also failed their first assessment tasks, and were told online in forums like these that they didn't have to worry and could still achieve the mark that they wanted, and this provided them with false hope and a false sense of security. They ended up not feeling as much urgency and pressure to try their best at redeeming themselves, and were disappointed when their ATARs came out at the end. They also starting gunning for courses with ATAR requirements that were "out of their league."
That being said, if there is a course you want, I suppose you should still try to maximise your efforts (definitely better than laying around being depressed). Try to focus on your own mistakes and how you can improve, rather than comparing yourself with others (the grass is always greener blah blah blah). Also, if you are trying to get a 99+ ATAR just for the sake of it (flexing reasons idk) or for validation (parents, proving worth to friends, boasting on BOS), I recommend you stop studying for a while and just do some self reflection.
I've mentioned this in a previous post, but trying to get a high ATAR for the score itself rather than a course is honestly idiotic, put bluntly. Nobody (other than obsessed parents) will care about your ATAR a week after it is released. I know that in this forum, there is a "culture" that 99+ puts you on a pedestal above others, but let's be real - irl, nobody gives a flying f***!!!
P.S. I've never really understood this concept of "choking" on the day of the exam. I know that anxiety issues and panic attacks exist (personally I have been also diagnosed with an anxiety-related disorder), but a lot of people seem to think that "choking" is out of their control when REALLY, it's just a lame excuse for bad practice. When you ARE practising, make sure to simulate these anxiety-inducing conditions. Also, know your content so well that when you are performing, it is by instinct rather than actually thinking. You won't miraculously have a Eureka! moment (at least theres a low probability of doing so) during the exam, so what you're writing should really be a lot of instinct. So yeah, to prevent "choking" just know your content and practise in the right conditions.
TLDR: Failing your first assessment block means you probably won't get a 99+ ATAR (it IS the top 1% of the state to be fair) but that doesn't mean you shouldn't try. Just make sure to try for the right reason.
