It's likely the extension was mis-assembled at the factory.
The Remington extension is unique in that the tube and the collar are two separate pieces.
To properly assemble the unit, the collar is screwed on hand tight, THEN the extension tube is screwed in until it just contacts the gun's magazine.
If the extension isn't contacting the magazine tube, OR the extension is over torqued against the gun's tube, the two tubes can get mis-aligned and cause hang-ups.
Another possibility is a defective extension or magazine tube being out of round.
I'd check for proper assembly, and if that doesn't fix it, send it back to Remington.
To disassemble the extension, REMOVE the bracket screw, then remove the bracket.
Unscrew the magazine extension CAREFULLY. Once the extension tube is unscrewed the magazine spring will attempt to force it's self out of the gun, and it's a STRONG spring.
With the extension tube off, unscrew the extension collar, and remove the barrel.
As for magazine capacity, most shotguns and magazine extensions are listed as the TOTAL number of shells the gun will hold.
The 870 with a 18" barrel will hold SIX shells in the magazine and ONE in the chamber for a total of SEVEN.
A 20" barrel holds seven in the mag and one in the chamber for a total of eight.