It means that the format is set up to use the etex primitives such as
\dimexpr All formats do this by default these days except
tex which is set up to not use the extensions and use dvi output so that it is classic plain TeX.
LaTeX always uses this mode (whether or not shell escape is used) see
$ pdflatex \\relax
This is pdfTeX, Version 3.1415926-2.4-1.40.13 (TeX Live 2012)
restricted \write18 enabled.
entering extended mode
will show the (quite short) etex manual that explains all the extra primitives, or the source of that will be in your installation somewhere)
etex provides extra registers so you do not run out of count registers it provides infix arithmetic so you can use
\dimexpr\textwidth - 1em instead of
\advance\dimen@ by 1 em and lots of other small improvements.
Note that these are not "loaded" in any sense they are already compiled in to the program, it is just a binary switch whether to expose them in the document or hide the functionality and act like classic tex. So any startup delay you see is not related to this.