[4] The generic name honours German naturalist Gustav Kunze,[5] while the specific epithet is derived from the Latin adjective ambiguus meaning "doubtful" or "uncertain".

A pale pink-flowered hybrid with Kunzea capitata has been recorded from Stony Range Flora reserve in Dee Why in Sydney's northern beaches region.

[7] Kunzea ambigua is found from northeastern New South Wales, having been recorded in the Grand High Tops of the Warrumbungle National Park,[2] through Victoria and into Tasmania.

[8] It is associated with scrub she-oak (Allocasuarina distyla), Melaleuca nodosa, cheese tree (Glochidion ferdinandi) in heath or scrub, and with red bloodwood (Corymbia gummifera), peppermint gum (Eucalyptus piperita), forest red gum (Eucalyptus tereticornis), woolybutt (E. longifolia), thin-leaved stringybark (E. eugenioides), and white feather honeymyrtle (Melaleuca decora) in forested areas.

In Wilsons Promontory in Victoria, Kunzea ambigua is the dominant species within scattered areas of treeless heath that occur on granite hills and mountains.

[9] In recent times, it has been discovered that the Kunzea ambigua plant grows abundantly in Flinders Island and North East Tasmania.