The architecture of “not bad”: Decoding the Chinese source code of the void

In Australia from my experience "not bad" = "good", "pretty good" = "amazing", "bit shit" = "really shit".

I don't think its as much that everything positive is just a non-negative, but that everything (especially emotions) is shifted towards the medium. Maybe it comes from a desire to not be abrasive and always soften everything, but I'm not sure.

Related also to the way Australians and New Zealanders use understatement for humorous effect, e.g. that last example you gave could be used to describe any condition up-to the point of death.