Your question is a special case of the more general question why European settlers in many parts of the world used indigenous place names rather than making up their own. North American examples include many state names (Mississippi, Tennessee, Kentucky).
Here is the first chapter of a longer work discussing indigenous and European place names in Australia. From that document:
The earliest recorded Indigenous placenames are over 40 names recorded as placenames
in the Sydney area (Troy 1994). One of those that Troy lists, Parramatta, is
unequivocally an Indigenous placename that has been taken into the introduced system.2
Such incorporation of Indigenous placenames into the official introduced placenames
set has been sporadic, as Monaghan (this volume) points out. The surveyor Thomas
Mitchell's preference for Indigenous placenames is well known, and contrasts with some
other explorers (but see Carter (1988:67) for discussion of his motives for using
them). Later writers sometimes also expressed the desire to use Indigenous
placenames. For example, Edward Stephens (1889:498) wrote in an essay on Aborigines:
In conclusion I express the hope that young Australia, instead of reproducing the
names of all the counties, towns, hamlets, mountains, lakes, and rivers of Europe and
Asia, will preserve the names which the aborigines of Australia gave to the
distinctive features of their ancient home.
More recently, in 1986, in a speech at the Second National Nomenclature Conference
Dorothy Tunbridge urged the importance of documenting the Indigenous placename
networks, and of establishing an official body that would actively and systematically
record Indigenous placenames, and also of reinstating the Indigenous placenames
(Tunbridge 1987).
[above quote edited for spelling]
Based on that, it sounds like in the case of Australia, the use of placenames (indigenous or European) was up to individual explorers or surveyors. I would guess in the case of North America, it was often a matter of convenience as Europeans had to communicate with Native Americans as they moved into the land and the most convenient names to use were those the Native Americans were already using.
