Not true. For a couple reasons. A 16 ga extension cord in open air is entirely different than a piece of Romex buried in an insulated wall. The cooling effects from open air are far different than wire jammed inside a wall. Do understand that extension cords are expected to be uncoiled during operation for this very reason. Leave them tightly wound on a roll and they can melt.
If you apply a direct short to the extension cord, the breaker will trip before the cord melts.
As for power strips, there are some heavy duty ones with sizable internal conductors. Others have very little. But they do not adjust the breaker size to match.