I never understood the reasoning behind that feature. It causes problems wherever it is used and contributes to malware spreading. And irritations like this, when someone tries to conform to a filename convention, but literally cannot do this with the feature on.
They should get rid of that default setting. Even when off, Windows is aware of file name extensions, for example when renaming files. There is just no benefit, no benefit at all in hiding, but a ton of problems.
Imagine, if the file were named index.htm instead of index.html. Windows uses the same Icon for those.