The Strata Manager is correct about the tiles. Both a by-law and a Special Resolution Motion are required. This is because the tiling and waterproofing are deemed to be a major renovation under the new Act.
You are correct about the OC being responsible for the maintenance and repair of the original tiles and associated waterproofing affixed to the common property walls at the time of registration of the strata plan.
After the OC has repaired and or replaced the faulty tiles and waterproofing, and if the original tiles no longer suit the modern aesthetic of your apartment, have you considered having the surface of the tiles repainted? This painting would be deemed to be a cosmetic renovation and no permission from the OC would be required. I have seen this process used quite effectively on various Australian ‘home shows’, particularly if it is carried out by a specialist company.