Lewis Hamilton's race ended prematurely due to a mechanical issue on Lap 17, resulting in a DNF, while George Russell's hopes were dashed when he crashed out on the penultimate lap.
Despite Mercedes' optimism with a new car concept, their struggles of recent years persist, reflected in their current fourth-place position in the constructors' standings, trailing Red Bull by a significant 71-point margin after just three races.
Wolff pinpoints Mercedes problem
Speaking to Sky Germany in Melbourne, Wolff opened up on what he believed to be the cause behind their inability to mount a significant challenge at the top of the grid.
"[It's] very bad. When you consider that a few hours ago [during FP3] we were within a tenth and now we are seven-tenths away and even more with the second car, it's just not satisfactory."
When pressed on why he thought that was, Wolff said: "Like the years before, this car has such a small performance window that if it's a little too hot or a little too cold, the car changes.
"Even if the track temperature changes, the driving is completely different. That's the stability that we lack and if the stability is there, then perhaps it's not about the last tenth of downforce but about the driver knowing where the limit is.
"We saw that the conditions were different in the morning and the car was more competitive, but I don't want to cling to such small performance sessions with rose-colored glasses.
"The car has to work everywhere. It got windy and the car didn't work, the parameters changed, but that applies to everyone else too."