Replace "Multiple Sources" error with picker UI #6236

Description

Improve the user experience when multiple extension sources are detected by replacing the current error message with an interactive picker UI that defaults to the main registry but allows user override.

Current Behavior

When multiple extension sources are detected, users receive an error message that interrupts their workflow.

Proposed Behavior

• Present a picker UI when multiple sources are available
• Default to the main registry
• Allow users to override the selection
• Optionally: Default to main registry with a warning about other sources (doesn't break flow for most users)

Acceptance Criteria

• Replace error with interactive picker UI
• Default selection to main registry
• Allow user to override default selection
• Consistent behavior across CLI and config-based workflows
• Engage with UX team on optimal experience (picker vs. default with warning)
• Update error handling and messaging

Benefits

• Reduces friction in extension installation workflow
• Provides transparency about available sources
• Maintains user control while offering sensible defaults
• Improves overall user experience

Parent Issue

• [EPIC] Extension enhancements #5767 (Extension enhancements EPIC)