The 28th seed, who won titles in Basel and Buenos Aires last season to signal his potential, crashed out 6-4, 2-6, 6-1, 6-2 after struggling physically against American Eliot Spizzirri.
The 19-year-old has been dealing with a back issue, which forced him to pull out of warm-up events in Brisbane and Adelaide.
"I don't regret a thing," he said of coming to Melbourne despite not being fully fit.
"I wasn't playing 100 percent, but at the same time it gives me maturity to keep going, to understand my body, to understand my limits.
"Hopefully I'm still young and I'm still getting experience from that."
Fonseca made his big breakthrough at Melbourne Park last year as a qualifier when he beat top-10 player Andrey Rublev.
"My back is 100 percent, I'm healthy again," he said. "I just needed time. I just need rhythm.
"I think this season is going to be great for me," he added.