In principle the sight bar should be as far in front of the riser as possible - more accurate.
Two limitations; - parallax means the archer needs to be more stable re aiming as the extension increases or the sight will zoom about all over the place. - bigger extension means the sight has to placed lower down the sight bar so eventually you run out of arrow fletching clearance.
If possible a single extension length should be used for all distances - no need to change extension with distance so one less thing to go wrong. Only feasible for high poundage archers. Lower poundage archers will generaly get away with maximum extension up to 80 yards and bring the sight back for 90m/100 yards.