From The Zen of Python:
Explicit is better than implicit.
In my opinion, your first example is explicit. It takes two values and processes them in well-understood ways. Although it "feels" a little strange to new Python programmers, it behaves just like expect. list.extend accepts lists, so it treats strings like a list of chars.
Your proposal alters the semantics of list.extend to be equivalent to list.append, but only when dealing with strings. That would be a real surprise to someone who wants your function to treat your strings as lists of chars and who would then have to call it like test(x,list('test')).
You can do what you're asking, but please don't. :-)
