Blocked under the supposed reason of privacy, but extensions can still see every request, and inject whatever javascript they want, exfiltrate your data, etc. Meaning the reason is pretty clearly not privacy.
Seems like a pretty clear case of being two-faced, and a small page laying out the details would be super helpful.
Or that extensions can still inject javascript, observe and log requests, exfiltrate data? I mean the api docs will tell you that. Extensions can do all that because they couldn't do a whole lot without those capabilities...normally used for legit purposes, but the apis can't really glean intent.
See things like onBeforeRequest for observe. Injecting javascript is called a "content script" in chrome extension terms. Exfiltrating data could be done in many ways, given that you can inject a "content script".