Has anyone seen this error when trying to upload files with SDFCLI?

A file upload error occurred.
Details: Access denied. No extension allowed access.

This usually is because of permission issues with the role, or restricted access to the folder where user is trying to upload files.

I'm using the default 'Developer' role (55). Is there a specific permission on folders related to 'extension' as mentioned in the error?

The message is not related strictly to extension. The message is from server side. Can you double check if there is a specific folder which is giving this error? If that's the case you might need to check if this role (55) is not restricted to access that folder.