It turns out I wasn't completely correct. As per my second point, the interpretation of annotations needs be clarified, but my first point about default_args including the annotation count is incorrect. 

My error was made because of the documentation for EXTENDED_ARG. The current text implies that you need to combine the argument value of the EXTENDED_ARG opcode with the argument value for the previous opcode. However if you're using dis.Bytecode() to extract bytecodes, that composition is done for you - you can effectively ignore the EXTENDED_ARG opcode.