> So to be clear, the existing Firefox on Android which has broad extension support is going to be replaced with a version with less extension support?

Probably not. By the time the switch for release (non-nightly/beta) Firefox comes, I expect all the currently supported extensions will still be supported.

In the long-run, since the new architecture will be generally easier to develop, I hope that some of the WebExtension APIs supported on Desktop, but currently not on Android (on Fennec), will also become available on Android (on Fenix).