Permitted upload file extensions: Not Working

I must be missing something obvious here.

Creating a file field works fine except for the "Permitted upload file extensions:" setting.

Setting this to blank works (any file accepted, provided it is not on the munge list.)

However even if I enter an extension (with no dot) in the "Permitted upload file extensions" field, that file type is greyed out / not available when I try to attach it to a piece of content.

Not sure what the problem is here, but have gone over all the permissions and looked at the code, still no worky.