Silly you.
Yes, you are correct in your assessment.

Luckily, I had forewarned them that I might revise the instructions if they complicated matters rather than moved the analysis forward.
So, I met with them today and took away the <extend>, but allowed them to link a use case to another if it was REQUIRED to satisfy the goal of the base use case (i.e. <include>). I reiterated my earlier instruction to use a 'system boundary box' to group related use cases together, but since they cannot use <extend>, these UC bubbles will be unconnected.
They heard me this time and it sunk in (yes, everyones' advice to threaten bodily harm worked GREAT).

Go and buy them Bittner/Spence Use Case Modeling.
I recently googled "Use Case Modeling" by Kurt Bittner and Ian Spence, and it looks good. I've been using Alistair Cockburns book, and apparently Bittner/Spence is compatible with Alistair's approach.
I'll pick up the book for future reference, as it'll be too late to apply to my current situation. As for asking them to read it now, well, they're already behind the eight-ball and in fact wanted to skip over some things just to make their deadline. So... I'll wait until they pass their deadline before suggesting this.

Check this forum - use the search function and be persistent - for an ongoing thread regarding this. I think the thread subject may have mentioned Java
I'll try again. The search facility doesn't seem to recognize double-quotes around 'exact match'. So putting in
"use case" java
... treats it as three distinct words. Putting in "use case" as a phrase is better but then I don't get the "java" keyword in there.
I will try again.. one thread "Re: UML book recommendations?" looks promising but I'll have to be get back to this later on in the week.
Thanks to everyone for their help.. it made a difference.
gary