You are providing inaccurate advice. It is totally illegal to do any work in Thailand without the apprropriate work visa. If you are caught by police or immigration (and many are every month) then you face heavy fine, jail time, expolsion and banned from returning to Thailand.
I had been on an extension of stay based on being over 50 years (retirement) for a number of years. Then due to puchasing a house I did not have the required 800,000 thb in the bank so I applied for and got an extension based on being married to a Thai lady. However the Immigration officer advised me that I cannot keep changing the reason for extension and that in future I would need to continue to apply for an extension based on marriage. Regardless of her warning, the next year my finances were better and I had no problem in applying for and getting an extension based on being over 50.
Yes. You need a long tern visa or extension of stay to represent the reason that you are spending a long time in Thailand, Basically, Immigration are telling you that you are no longer a tourist.
It is requested by Immigrationb but not always required. Immigration will ask for your 12 month lease and you need to provide it if you have one. If you do not have a lease, then Immigration will question you about your accommodation and may then require additioanl documentatio. In my case, I do not have a lease because I live in my (Thai wife's) home. So I must provide my house book to Immigration.
Even if Immigration denied your application for an extension (eg if you already had on extension) they would give you a stamp giving you 7 days to leave the counrty.
My experience of living here for well over 10 years is that Immigration will always take action if they find people working without an appropriate work permit. Period. Trouble: big fime, jail, expulsion from the kingdome. ban on reentry.