According to Smogon's moveset usage stats for this month in Gen8 OU, the only Pokemon that is relevant in the format with Terrain Extender being the most popular item choice is Tapu Koko, with Indeedee having the item as the second most used. Then, as I went to the 1825 elo usage stats, the numbers decreased significantly, with Indeedee almost never carrying the item and Tapu Koko carrying it only about 14% of the time.
So why is it so unpopular especially as the players get better?
The main reasons are because:
- People don't usually make teams centered around the ability making the 3 extra turns not that useful
- There are often much better items that outclass Terrain Extender
As for examples, Tapu Lele works best as on offensive Pokemon that spams attacks rather than terrain support, so Terrain Extender is very underwhelming compared to Choice Specs or Choice Specs. Rillaboom is a little better at using the item because it has access to U-Turn and other team members can benefit from Earthquake being weakened, but Choice Band and Life Orb are usually better for exploiting its power. Plus Grassy Terrain is a double edged sword because opponents are also healed.
The exception to this is Tapu Koko, where I'd say Weather Terrain is definitely viable under the right circumstances. Tapu Koko is commonly paired with Electric Seed Hawlucha because it's given a lot of opportunities to come in and set up. For this strategy to work electric terrain has to be active, and the three extra turns can be very beneficial.
This usually isn't the case, however, and most of the times Pokemon only use their terrain to give themselves a buff rather than their whole team.