Common Linux distros will target one of the profiles, or a commonly supported subset like RV64GC.

Beyond that, what other extensions a particular board or chip supports, doesn't affect regular uses like web browsing. Specific apps or software libraries may use an ISA extension if present. Same as for other ISAs.

Code for embedded systems is optimized for the exact cpu in there. Same thing for highly specialized jobs (scientific / datacenter type stuff).

In short: yes, fragmentation wrt ISA extensions, hardware & software support exists. In practice, it isn't a big problem as some claim it to be.