What is a unity extension asset?

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This is just about the license type and the restrictions are exactly what you can read there. You need once license per user / seat. Those licenses are usually used for Unity editor extensions. So editor tools which are not assets that are shipped with your game but add new features to the editor. If you have never seen any editor extension, here’s my free UVViewer as an example which can visualize the UV map of a mesh inside the Unity editor. You just need to place it in a folder called “editor” inside your project, Now you can open the viewer from the Tools menu of the Unity editor. Once open you just need to select a gameobject in the scene that has a MeshRenderer and the viewer will display the UV map(s) of the mesh. This is just an example, There are countless of editor extensions out there.