If you do extend for only 1 year, the extension date is 1 year from the date you renewed it.
So if you have say 3 months left in your passport and you renew 1 year you'll only get 9 months extra.

If you extend the maximum 5 years, the extension period will be added to the date of renewal.
So if you have 3 months left, your new passport will expire in 5 years and 3 months from now.
This is within a reasonable time frame of course, I doubt you can renew one day and then the next day to get 10 years extension.