The most popular operating system hides it from the user, so clarity would not improve in that case. At leat one other (Linux) doesn't really use "extensions" and instead relies on magic headers inside the files to determine the format.
Otherwise I think the decision is largely aestethic. If you value absolute clarity, then I don't see any reason it won't work, it'll just be a little "ugly"
If you mean Windows, that's not entirely correct. It defaults to hiding only "known" file extensions, like txt, jpg and such. (Which IMO is even worse than hiding all of them; that would at least be consistent.)
EDIT: Actually, I just checked and apparently an extension, even an exotic one, becomes "known" when it's associated with a program, so your point still stands.
mostly for executable files.
I doubt many Linux apps look inside a .py file to see if it's actually a JPEG they should build a thumbnail for.
https://wiki.archlinux.org/title/XDG_MIME_Applications
A lot of apps implement this (including most file managers)
It's also one of my favorite oddities on Linux. If you're a Windows user the idea of a database of signatures for filetypes that exists outside the application that "owns" a file type is novel and weird.