I believe the MT 3 extension was mentioned because of the short travel of the tail stocks quill and for some jobs reaching across the width of the carriage and cross slide Spro. For MT drill shanks there would be no need for the extension.
Fwiw, when using ER collets as a work holding method in a lathes head stock I'd make a point of not going with a MT tapered shank for the collet chuck. Yes there a bit faster and maybe easier to use. But they seriously limit your work piece length. Lathes have a hollow spindle for very good and logical design reasons. These are easily available
https://littlemachineshop.com/products/ ... uctID=5452 and a back plate can be made up to fit any lathes spindle nose. Personally if I was to use one of these verses building my own ER collet chuck from scratch I'd add some set screws and have it work much like one of the high cost set true 3 jaw scroll chucks so any run out present in the lathes spindle, collets or chuck could be dialed out. If a lathes collet set up can't give you way under .002" run out there's little to no reason to even use them. Frankly I'd be wanting at least .0005" or better. And the less I was spending for the collets themselves the more I'd want that set true feature. YouTube is loaded with videos showing some abysmal and depressing run out numbers for a whole lot of the off shore collet sets. The worlds best and most accurate ER collets and therefore most expensive are most likely made by the inventor of the design Rego-Fix in Switzerland. Unless you get very very lucky even there collets will come with some extremely low but still measurable run out. With a fixed MT shank on the collet chuck there's no way to lessen the run outs the collet chucks internal taper and plus what the collets themselves will have. Plus it's MT shank blocks the spindle bore that can be used for much longer work if the better spindle nose mounted chuck can be used.
A MT shanked ER collet chuck CAN be of real use when used in the lathes tail stock. Tightened properly the ER collets work very well for holding the 1/2" reduced shank Silver & Deming type drills as one example.