The German 12th seed, a semi-finalist in Melbourne in 2020, lost to 107th-ranked Michael Mmoh (25) 6-7 (1/7), 6-4, 6-3, 6-2 on Margaret Court Arena in round two.
It followed two defeats at the recent United Cup, his first ATP matches since tearing ankle ligaments at the French Open in June.
A planned return at the Davis Cup in September failed to materialise when he pulled out after experiencing "extreme pain".
The two-time ATP Finals champion, who has dropped to 13 in the world, was clearly still struggling against the American Mmoh, hitting 58 unforced errors and having his serve broken eight times.
"Wow, this is the biggest win of my career without a doubt," said Mmoh, who will play countryman J.J Wolf next after he beat Argentina's 23rd-seeded Diego Schwartzman in three sets.
"Life is crazy, this is insane."
