why would he asked for an extension if he would just retire?
This has actually happened numerous times.
remember, these are not living beings. They are a series of 1's and 0's. They are guided by rules and formulas, and these aren't perfect. They get to the end of the season, and FBB has a formula that determines how much a player feels he's worth. It gets to the retirement, and there's a separate formula that I have no idea how it determines if he should retire.
Bottom line: logic used by these "players" should not be expected