The extension mechanism [1] allows jar files containing APIs that extend the Java SE Platform to be installed into a run-time image so that their contents are visible to every application that is compiled with or runs on that image.
The extension mechanism was introduced in JDK 1.2, which was released in 1998, but in modern times we have seen little evidence of its use. This is not surprising, since most Java applications today place the libraries that they need directly on the class path rather than require that those libraries be installed as extensions of the run-time system.
This feature will be deprecated in 8u40 and may be removed in a future JDK release [2]. There is no change to the runtime behavior.
[1] http://docs.oracle.com/javase/8/docs/technotes/guides/extensions/index.html
[2] http://openjdk.java.net/jeps/220