Why do some USB extension cables have an extended shroud at the female end?

USB 2.0 extension cables are illegal from USB specification standpoint. This is because the extra imperfection along USB 2.0 transmission line causes massive degradation of signal integrity.

So no test procedures nor acceptance criteria are there, and anyone can craft whatever they feel. There are more variants of overmolds, like this one below. Use at your own risk. Works fine for me though.

An example of a USB cable without a protective sheath around the connector.