I thought to put this in the extensions forum, but it`s the core that makes it work.
The drill...
Mount the extensions and in a script running a new shell, make a new $PATH into it.
Then the script runs the app. and it should work, only writable files need to be external.
The config. files have to be written to, so these files inside the extension file are links.
The config. links point to persistent storage of course, through a main /etc link in ram.
Having the main /etc link in ram allows it to point to the selected partition for storage.
The config. files would be in a special dir. in the extension and copied to the storage.
So then there`s no links outside the extension file that mirror files inside it.
However there are config. files outside it, but it`s a necessary evil, as it is in TC now...
This means that the apps. in the extension files must have their writable files doctored.
In tests, simple apps. worked with no modifications, bigger apps. need more work.
This is the down side, the current TC extensions need no doctoring to work I believe.
Currently making new extension files is a utility to extract and Squash them. ( I believe )