What I expected to happen was the when a piston were turned off while a redstone signal passed over the extension, the piston would retract.

What actually happened was that the piston won't retract until the redstone signal is removed. Otherwise is acts kind off like a BUD.

Steps to Reproduce:
1. Place down a piston (any) and place a block over where the extension would be if the piston were powered.
2. Have a redstone signal go through the block in any way.
3. Power the piston.
4. Unpower the piston. At this point the piston won't retract unless the redstone signal is removed from the block.

The video provided would better explain what happens.