You are setting it too short. The 188cm is to the end of the outer tube not the holes. Like sean said the length marking you want should be seen.
I think you answered your own question with "So if I pull the extension out so the next pin (190cm) is engaged and the 188cm marking is now showing and pointing at the end of the clamp and measure it is now 188cm. "
That 2cm can make a big difference