Issue Description

scripts/extension/Prepare-Extension.ps1 has a 142-line entry point block that cannot be tested. Similar to Package-Extension.ps1, this script has 100% method coverage but low line coverage due to the untested entry point.

Current state:

• File coverage: 41% line (102/251)
• Method coverage: 100% (8/8)
• Entry point: 0% coverage (142 lines)

Acceptance criteria:

• Extract entry point logic into Invoke-PrepareExtension function
• Add tests with mocked file system operations
• Test directory copy logic, manifest validation, and cleanup
• Achieve ≥90% line coverage

Estimated coverage improvement: 41% → ~97%

Additional Context

Depends on same patterns as Package-Extension.ps1 refactoring. Can be worked in parallel.

This is part of a broader effort to increase unit test coverage from ~42% to ~85-90%.