I don't think that's right. Yes, the work permit extension application does have to be submitted so that it's received before her current work permit expires - but, without the PR application, she isn't eligible for an OWP. The extension of the work permit would be assessed based on the original terms and if it's denied, she'll have to leave Canada.
You're not saying what kind of PR app she intends to submit "later" - if it's an inland spousal or common-law PR ap (which would make her eligible for an open work permit AFTER she passes the initial assessment of eligibility for PR in the spousal/common-law class), the extension application HAS to go with the inland PR application and BOTH have to be received by CPC-Vegreville before her current work permit expires. Also, she must be a qualified spousal/common-law PR applicant at the time she submits the applications. So timing is important. I say this because if she's wondering whether she can submit the extension application now and wait to submit the PR application until later because she's waiting to qualify as a common-law partner - the answer is "No". Someone in Canada on a restricted work permit is not eligible to extend that permit to an open work permit unless they are an eligible spousal or c/l PR applicant at the time their initial permit is due to expire.
If someone is an eligible PR applicant (for example, they got married during the term of their initial permit) and they're now submitting an inland spousal PR application and an extension to the work permit, they are authorized to continue working under the terms of the initial permit, even though it's expired, until they receive their new open work permit after the first stage of assessment of the PR application is complete (about 6-7 months after the application is received at CPC-V).
