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If I have a table lamp, (for which a 1A fuse is technically appropriate but the label underneath might say 3A on the basis that 3A and 13A are the two values commonly sold in the shops), and the lead gets a bit frayed, and I replace it but only have 1.5mm² available so use that, I wouldn't then expect to replace the fuse with a 13A type on the basis that 'the fuse is only there to protect the cable, not the appliance, and it is bad practice to "fuse down" below the cable rating.'
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I don't think anyone is saying it is inherently bad practice to use a fuse of lower rating than the cable. Your table-lamp example is a fixed load that will never approach 3A, so there is no disadvantage in fitting a 3A fuse. However, where the possible future load is unknown, such as in the OP's extension lead or a cordset, an undersized fuse might unintentionally be subjected to a prolonged low overload. A 1.25mm² extension cable fitted with a 5A fuse 'because it is only powering AV equipment' might in the future be used for a 2kW load. The fuse will not blow, but the plug will be subjected to unnecessary extra heating.