You are mistaken, and its a common misconception. The effect on image quality has nothing to do with magnification, or reduction, but everything to do with additional optical elements that are not optimized for any one optical system. People conceptualize the ray traces and think "spreading" them or "compacting" them, but ... that's not exactly how it works.
Consider - all the different lens aberrations. The IQ is all about controlling those aberrations. No "fits all" design, of any magnification, will do that effectively. You'll find lenses that the device works acceptably well on, and other lenses that it does not work well on.
Also have to consider ghosting and flare.
Also have to consider mechanics - as the lens to sensor (or film) lateral alignment is not well controlled, and adding other elements will introduce some de-centering in the entire optical path.
There is a reason there are dedicated extenders, or extenders that work only on certain lenses. And even with the latter, we know that performance varies quite a bit.
Having said all that, its an interesting concept, and I'm sure it will have its fair share of use, as well as its fair share of refinement, should it do well in the marketplace.
