Extensions are a way to extend the functionality of Kiosk while keeping the core functionality intact. They are a way to add new features to the Kiosk without having to modify the core code or move the assets elsewhere.
There are two types of extensions:
Ones that do not require Extensions API to function. They usually serve the purpose of adding custom metadata to the Kiosk or wrapping / working with exising objects such as
KioskOwnerCap. An example of an extension that does not require the API is the Personal Kiosk extension.
"Permissioned" extensions use the Extensions API to perform actions in the Kiosk. They usually imply interaction with a third party and provide guarantees for the storage access (preventing the malicious actions from the seller).