3. You can use highly enriched uranium (HEU) for things other than weapons, but the weapons are the only things that require HEU. Medical isotopes and propulsion can be done with LEU. For instance, Argentina produces medical Mo99 from LEU [1]. US Navy wants to switch to LEU for submarines [2]. One of the reasons for these developments is exactly proliferation risk management.
> 3. You can use highly enriched uranium (HEU) for things other than weapons, but the weapons are the only things that require HEU.
OP seems to expect everyone to believe that any regime invests years and small fortunes in research sites built in networks of bomb-proof bunkers buried inside mountains, right next to their network of ballistic missiles, to research medical applications.
You're suggesting that honest countries with no intention of building nuclear weapons would have no reason to ever try and hide or protect their nuclear sites. This is probably the single worst point in history to make that argument.
Australia's future nuclear submarines are planned to use HEU not LEU.
HEU has clear advantages over LEU for submarines – LEU submarines need to be refuelled once every decade (give or take a few years), weapons grade HEU reactors are never refuelled – the initial fuelling is enough to last 30-40 years, and by the time refuelling is becoming needed, the submarine is retired/scrapped.
This was also part of Australia's justification for backstabbing France over AUKUS. Australia was paying France for diesel-electric submarines, but if it wanted nuclear, France can provide that too – but French nuclear submarines are LEU not HEU – the US and the UK are the only nations which have weapons grade HEU subs. [0] Of course, an arguably much bigger factor was Anglosphere strategic alliances versus greater cultural/political distance from France, but it is diplomatically helpful to be able to appeal to a justification which is more objectively technical in nature.
In an attempt to manage non-proliferation concerns, I understand the AUKUS plan is that when they start constructing nuclear submarines in Australia, they'll build and fuel the reactor in the UK (or possibly the US, but the UK is apparently more likely), ship it fuelled to Australia for installation in the submarine, and then at the end of the submarine's life, the reactor will be removed from it in Australia and then shipped back to the UK for defeuelling and disassembly. But, I guess it is an open question to what extent such an exercise is required by the letter of the non-proliferation treaty, versus whether it will be done that way simply to close down a potential line of diplomatic and political criticism.
[0] Russian and Indian sub fuel is HEU by IAEA definitions, but significantly less enriched than the US/UK subs, which use weapons grade uranium as fuel. Some Soviet era subs did use weapons grade HEU
[1] https://inis.iaea.org/records/fe51q-17w28/files/35015774.pdf
[2] https://fissilematerials.org/library/doe16.pdf