Why was the BlueprintEntity type node added in the scene tree for the engine blueprint, but no Entity type node added for the engine itself. Why was the BlueprintEntity not just 'extended' via script?
Ultimately, the Entity script and the BlueprintEntity script have very different functionality and properties. The do not 'share' any common functions or properties, so making one extend the other would confer no benefits and would 'pollute' the other with things it does not need.
So they do not extend one another. The only thing they have in common is that they are Node2Ds.