Check if I'm describing this correctly:
Spent casing still in chamber, the partially extracted casing sticks in the chamber and the extractor slips off, the slide cycles and a round is fed from the mag into the back of the spent casing in the chamber. Clear by locking the slide open, removing mag, cycle slide (repeatedly if necessary) to remove casing from the chamber, then re-load. Since there's a casing in the chamber, cycling the slide forces the extractor claw to move out against spring tension as it contacts the back of the casing, and then spring tension forces the claw into the rim to hopefully extract it when the slide is pulled rearward by hand.
The malfunction drill starts with a round or spent case placed in the chamber manually, then slowly close the slide to feed a round from the magazine into the round already in the chamber.
Coincidentally, it wasn't very long after doing this drill in one of Gabe's classes that I had it happen at a USPSA match. I believe the cause was too much dirt getting into the chamber via magazine dropped on the ground in conjunction with aluminum case ammo. The spent case expanded and stuck in the chamber after moving rearward enough to cycle the slide, and the extractor apparently slipped off the rim. The extractor was fine, never had a problem before, or since.