When the Extension tracking is enabled and a user is passed over a line or arc temporary osnaps are added that are used to get a point on the extension of those segments. If the extension of the two segments intersects, the user is getting the intersection of those segments. In particular, when the cursor passes over an entity then little crosses appear that indicate that the extension of this object is available. If the extension of a line or an arc is enabled (by passing the cursor over this object) then the user can move the cursor close to the extension of this object.  At that time the extension line will appear providing also intersection extensions of multiple objects like below.