The Extension section in a horizontal pattern is executed after the Identification sections have completed and the CI has been identified. The Extension section allows adding additional attributes or relationships to the CI, or launching other patterns for further discovery12.
References:
* 1: ITOM: Extending Discovery/Service Mapping Patterns - GlideFast ServiceNow
* 2: Horizontal Pattern probe - Product Documentation: San Diego - ServiceNow

The recommended method for excluding specific software from discovery on Windows and Unix Servers in ServiceNow Discovery is by modifying the probes. Probes are the components in ServiceNow that collect data from devices. By modifying the probes, specific software can be excluded from the discovery process. Options A, C, and D are less direct methods for achieving this specific requirement. References = ServiceNow Discovery documentation, particularly in the sections related to probe configuration and modification.

The Location field for a discovered CI is populated by the Location field of the Discovery Schedule that triggered the discovery of that CI. This is done by the DiscoverySensor script, which gets the location ID from the Discovery Schedule and passes it to the Shazzam probe, which then updates the cidata with the location information. The Location field for a parent CI Type, a Port Probe, or a Discovery Dashboard report does not affect the Location field for a discovered CI.
References: Discovery - How Location field is set for a CI, How to pass discovery schedule fields to a CI record via discovery