IBM System/360 normally used the IBM EBCDIC 8-bit character set, which was designed simultaneously with the decision to use 8-bit bytes, before the launch of System/360. All the IBM computers older than System/360 had used 6-bit character sets.

The 7-bit ASCII code, with a few small differences from the current version, had been standardized in 1967 in USA as USAS X3.4-1967 and internationally as ISO 646.

No computer has ever been designed with 7-bit bytes, so all computers with 8-bit bytes, starting with IBM System/360, store the ASCII characters using an "8-bit extension of the 7-bit code".

Your document refers to this. The fact that ASCII has only 7 bits mattered only when the characters were sent over communication lines, when there was no need to transmit more than 7 data bits.

While in IBM systems EBCDIC was the primary character set and ASCII was used only for interchange with computing equipment made by other companies, in all the computers made by others the usage was reversed, ASCII extended to 8 bits was the primary character set, but EBCDIC was also supported for data interchange with IBM computers.