Google-Extended, a new standalone product token, does not prevent Google from using a website’s content for the Search Generative Experience (SGE) AI-powered answers. Google has clarified that SGE is considered part of the normal search experience and should be managed using traditional search directives. Examples have been shown of AI-generated answers being displayed in SGE from websites that explicitly disallow Google-Extended in their robots.txt file. If website owners do not want their content used in SGE, they would need to block Googlebot entirely, which is not ideal for most.

source: Google-Extended does not stop Google Search Generative Experience from using your site’s content