But when a Sydney teenager was detained and tortured after he allegedly ran away to join Islamic militants during the disastrous trip, the holiday led to a mental breakdown, his father claims.

Nine months after returning to Australia, the boy was one of two youths who was arrested in Bankstown last year, allegedly moments away from an Islamic State-inspired knife attack.

Chilling details of the Bankstown plot can be revealed for the first time following a court hearing in which the boy's father painted a sad picture of his son's descent into radicalisation.

The two 16-year-old school friends, who cannot be named due to their age, were arrested in October outside a laneway prayer hall and charged with preparing for a terrorist act and membership of a terrorist organisation.

They allegedly had a backpack containing a torch, a knife sharpener, two camouflage-print neck gaiters, a handwritten Arabic note pledging allegiance to the caliphate and two hunting knives bought earlier that day from the Bankstown Gun Shop.

The second boy, the stepson of a convicted extremist and a counter-terrorism target since the age of 12, had a video on his phone in which he held down a sheep as its neck was slashed with a knife, Parramatta Children's Court heard this week.

During an unsuccessful bail application this week, it was revealed that the first boy was detained in Egypt for a month after trying to escape a family holiday to join Islamic militants in the Sinai region.

He returned to Australia in January 2016 with the help of the Australian ambassador to Egypt. His father said his son was tortured in detention and spiralled downward after his return.

"Since Egypt, he's having a hard time," he told the court. "I said I would send him to a psychologist and everything would be all right."

Among the items found on his phone on his return were internet searches on "going jihad when parents are alive" and "Sinai ISIS" and an article titled "Jihadi John's journey from schoolboy to executioner", according to police allegations.

During 2016, the boy dropped out of school, ran away from home several times, was the subject of several police "child at risk" reports, slept rough at Central station for a week and had an AVO out against him to protect his mother after he allegedly punched a glass cabinet at home.

After the family's Parramatta home was raided in February, he said he wanted to be homeless, his father said.

Both boys have been on counter-terrorism radars for years and were being followed by police on the day of their arrest.

They both left their high school in 2014 due to an incident and the second boy turned to distance education while the first boy's father tried to get him into several schools, eventually enrolling him in an inner west high school in 2016.

The second boy was intercepted on the phone in 2015 telling his mother he wanted to "outdo" the shooting of police accountant Curtis Cheng.

Last year, he was observed to be among a small group of attendees at a Friday prayer session run by well-known counter-terrorism target Wissam Haddad.

In a recording played by prosecutors during the bail application, he was filmed abusing police as he sat handcuffed in Adnum Lane, Bankstown on October 12.

"Whatever Allah orders me to do I'm going to do it," he said.

"Anyone who works with the police is an apostate dog ... youse are nothing but a bunch of pigs and we are going to rule this earth by sharia ... all you pigs, inshallah, I will see you burn alive in hellfire."

The pair had allegedly bought two bayonet knives earlier that day. Unable to find a bag to conceal them, the first boy was seen chucking his school books, pencil case and calculator in a bin and putting the knives in his backpack.

The pair then caught a bus to the Adnum Lane prayer hall for what police allege were their final prayers and ablution.

In the police recording taken in the laneway, the second boy said he bought the knives to go hunting.

He also said popular youth leader Sheikh Shady Alsuleiman and Australia's Grand Mufti were "apostate dogs" because they worked with the government and he told the police that their children and wives would become slaves when Islam takes over.

The boys' barrister, Geoffrey Foster, said the case contained "a lot of circumstantial fluff" and content intended to "besmirch their character" and invent a "sinister plot".

However Magistrate Katherine Thompson denied bail, saying the first boy had a track record of disobeying authority while the second boy showed contempt for government and police, making it unlikely they would show up for future appearances.

An application to suppress Tuesday's bail application was dismissed on Friday.