Is this the new norm for Sophia? Is it dead?

[ss20ts]

Sophia is very generous with extensions. They already gave you 75 days (if I read the post correctly) - and could potentially give you additional extension. 
By no means you'd be granted multiple extensions at "normal" university. The school would be like "Didn't make it in time? Too bad, take your W or F and see you (and your money) the next term".

Colleges allow for courses to be changed to audit if one feels they are not doing well, but one still has to pay for the course, you just do not get credit for it, but have access to all the learning materials.

None of the colleges I have attended allow you to change your enrollment status to audit. You're free to withdrawal, but there's no refund after the first week or so and that W stays on your transcript for life. 

In my state audited courses aren't free either. You just don't take the tests and don't receive a grade. That's really not designed for someone earning a degree.