Lombok is not a compiler extension. Compiler extensions, aka annotation processors, are offered only specific capabilities that ensure that they preserve the Java language specification. Particularly, code that compiles successfully with an extension also compiles without it (perhaps requiring other classes to be available) and it compiles down to the same bytecode. Annotation processors are used to implement pluggable type systems (e.g. https://checkerframework.org) or to generate other classes (e.g. https://immutables.github.io/).

Unlike compiler extensions, Lombok compiles source files that do not conform to the Java language specification. Lombok is an alternative Java Platform language, like Clojure or Kotlin or Scala, except that it's a superset of the Java language. However, rather than forking `javac` source code and modifying it to compile Lombok source files, the Lombok compiler modifies `javac`'s operation by hacking into its internals and modifying them as it runs to compile Lombok sources rather than Java sources.

Having alternative Java Platform languages is perfectly fine. The problem with Lombok is that it doesn't present itself as such but as a library or a compiler extension even though it violates the Java language specification in ways that compiler extensions are forbidden from doing.