FIRST COMPLETE build is what the firearm becomes, not what is attached to the butt end of the lower.
If you put any receiver extension on a new lower, complete lower but no upper, it is nothing until you put on an upper, it's still an "other."
Let's walk this through.
You have a completed lower with receiver extension, doesn't matter what kind RE it is. You have no upper attached. Your lower is an OTHER.
You put a stock on that receiver extension. No upper. It is still an "other."
You put a brace on that receiver extension. No upper, it is still an "other."
You take off the brace or stock. ***Remember this next step because it determines what your lower will be from this point on.***
You put on any length upper, nothing on the receiver extension, no stock or brace. It doesn't matter FEDERALLY if it is a 7 inch upper or a 20 inch upper, it is NOW a completed and fully functional PISTOL and will be a pistol from this point on.
If you add a brace to it, no matter the barrel length, it is still a PISTOL, nothing changes.
Now you remove the brace and put a stock on the above PISTOL. Here it starts to get confusing.
If the barrel on the above "pistol" is 16 inches or longer, it becomes a RIFLE so long as the stock is on there.
But, if the barrel is less than 16 inches, you have created an illegal SBR because you put the stock on it. If you had put a brace on there instead of a stock, then that's fine, it's still a pistol. But a stock, any kind of stock, telescoping, fixed, or folding, makes it an illegal SBR.
Now, let's go back a bit. You have your completed lower, with receiver extension, no stock, no brace, and no upper with any length barrel ever being attached. It has never been completed as a fully functional firearm, it is still in the "other" category.
You add a stock to the lower (remember this step). Lower is still an "other" at this stage. Now you add an upper with a barrel 16 inches or longer. You have now a completed and fully functional RIFLE and will be a RIFLE from this point on unless you SBR it because the first completed build was a RIFLE.
Notice the order of things. You attach any length barreled upper to your lower first with NO stock on the lower, it is a pistol. First completed build was a pistol, it is now a pistol.
But if you attach the stock first, leaving it on, then an upper with a 16 inches or longer barrel, it is a rifle. First build was a Rifle, and now it is a rifle forever unless SBRed.
Again:
if first completed build was a pistol, you can swap back and forth from pistol to rifle to pistol as much as you want so long as you never have a stock on there (and it doesn't matter if it folds, telescopes, or is fixed) with an upper that has a barrel length shorter than 16 inches. The stock can only be on there with an upper that has a barrel 16 inches or longer.
But if the first completed build was a RIFLE, you can never make it a pistol (barrel length less than 16 inches) or it will be an illegal SBR, unless of course you SBR it before doing so.
To make a long story short, the last thing you should ever add to your build, even if the barrel is 16 inches or longer, is the stock. That makes all your lowers PISTOLs, at least in the eyes of the Feds.
The first completed build is what it is, not just if the lower had a stock or brace or bare receiver extension attached to it. Without ever having an upper on it, no matter what is on the back end of it, the lower is still just an "other."
Stupid? No question about it, but that's your tax dollars at work for you (or against you).