Presumably the extension would be prevented from further installs and would no longer load for new viewers. It would still show up for the streamer in their Extensions dashboard section, with a note indicating that the extension has been disabled temporarily.
There’s a number of plausible scenarios where an extension might need to be temporarily disabled without outright deleting it: back-end server issues, legal/licensing issues, a major severe bug, etc. Of course, deleting it is always an option, though making sure all the dashboard settings are the same when you recreate it is kind of a pain, especially because it’s impossible to view most version settings when an extension is in Hosted Test or Released. I understand not being able to edit version settings in those cases, but why can’t we view them? Not being able to see your user whitelists, asset zip file name, etc. is kind of a pain.
(And another thing: the upload timestamp for the asset zipfile doesn’t update correctly. It always shows the timestamp of the first file uploaded for that version, and does not update for subsequent uploads. The filename changes, but the timestamp does not.)