There are lots of club fitters and weekend tinkerers with more experience than I do.
But here is what I had found over the years.
It really depending on the golfer, how strong, how fast the swing speed and their habit of turf contact when striking the golf ball. I had one whom will not have an extension on his graphite shafts ever again. He is very strong and tend to take a big divot with any full shots not teed up. Broken a made for shaft extension from older shafts inserted 4 inches and broken a golfworks extension with 2 1/2 - 3 inches insertion. He also had broken shafts at the hosel with original OEM on many occasions.
For the average golfer if you prep both the shaft and the extension well ( build up to make sure the fit is snug before epoxy it ), you should not have any issue with minimum of 2" insertion.
As for the shaft dynamic with the extension ? Change of length and weight will effect the numbers, however, not many golfers could tell the difference in reality if you did not disclose the fact. 80% would be between the ears where they'll find any difference comparing the use of an extension and the original.
Always make sure the insertion fit is tight and epoxy correctly for better bonding, I will also build up the exterior and sand it down to smooth so no one will feel any bump on the end of the grip..