An Island is any territory completely surrounded by one sea zone. In AAP40, New Guinea is not an island
In reality, new guinea is an island, obviuolsy, but like australia it is too large geographicly to only have one seazone containing it.
Therefore fighters scrambleing have A LOT more distance to cover, rather than the immidiate airspace around an area such as, wake, on new guinea they would have exponentioaly more area to cover when patroling
it is assumed japan has enough airbases located about the island(s) that fighters can scrable to cover this large land mass, which is why it is an island by the games definition, it is also an island to give japan an advantage over the allies, and a bonus in its home sea zone