This situation currently results in bad rendering:

<ref name="a">Book</ref>
<ref name="b" />
<ref name="b" extends="a">Page 2</ref>

The functionality is pretty much fine, but the visible numbers are bad. The first appearance of name="b" is rendered as [2] instead of [1.1]. There is currently no easy way to resolve this. This is basically just like the Cite extension works: Parsing is done from top to bottom. The first time a <ref> appears, it gets a number. This is fine for top-level references. But the <ref name="b" /> is meant to be a sub-reference. This only becomes obvious later in the process.

The least minimal thing we need to do before deploying the feature anywhere is reporting this situation with an error message, e.g. "Can not change a non-extended <ref> to an extended one".