Is it possible to extend a visa in Thailand and re-enter with a new visa after exiting?

What does visa will be treated mean?

Yes. Doable

Just a few things to get clear first:

You didn't enter Thailand with visa on arrival. You entered visa exempt, which isn't a visa at all.

If your embassy still issues the visa, your plan will work.

I looked at your profile and I'm assuming you're talking about the Ottawa embassy. We have reports from this embassy that they are VERY slow in processing applications for a visa, and when they finally get to your application they will see the dates you submitted for your flight already passed and then they will deny your application. Ottawa and Paris are the only embassies that we have reports of this happening at (both the slowness and the rejection of applications if the flight date already passed).

I just wanted to make you aware that it's possible your application will be rejected, but if they do approve it then your visa will be valid for 90 days from the day it's issued. Once you have the visa, where and when you enter Thailand no longer matter and you can leave and return and activate your visa as long as it's within 90 days of being issued.

If they reject your application you can do a border bounce without a visa and just do another visa exempt 30 days + 30 day extension.

No problem I recently did the exact same thing