It's one of those rules you tell everyone, then you tell the ones who understand Amps when to ignore it. Like the one about not carrying solder to a joint on the iron, which is occasionally unavoidable and not a problem for an experienced solderer.
The worst problems I've seen with extension blocks have been contacts, either poorly-crimped internal bus joints or bad contact with the fuse. Plugs also have fuse problems, mostly spring tension contacts weakening with time. These problems are independent of the number daisy-chained but very dependent on load.
I've seen (but not used) a Japanese multi-way extension which was literally two slots in a plastic block. The number of insertable plugs depended on how bulky the plug body was. Earths, shutters... what are they?
OK, they're only on 100V but that's still fairly dangerous.