And check that some freewheels require you to take the axle out (to make room for the tool as the locknut on the axle may not be small enough to pass trough the freewheel tool hole.
As for impacting it with the hammer, yes it works yet with a "cheater" bar you can have similar effect rocking it sharp a few centimeters (the flex in the bar/wrench/fw tool/wheel slippage as it rocks against the wall), it's a more gentle/ample approach preventing shattering the tool/fw body that may happen (if poor quality of the tool or fw is present). I agree that an extension bar should never* be used on tightening anything as it's a killer on threads.

*unless you need to tighten a bolt/nut by angle not by torque value - like in header bolts on an engine - there you'd want a continuous movement to the required position and may be hard to get with a short handle - so an extension is even indicated as it's a gentle push until the "destination" marked on the angle compass.

Really it depends on the feel of the grip and strength on the fastener.
If it's hard treated, strong, possible shatter of bolts -> extensions,
If it's soft and may round/bend -> impact force