The ExtendedProperties.xml is mostly a report that the VBUC generates about some of the changes that it applies. I think it is also used by the ReflectionHelper class as an aid when trying to dynamically invoke a member.
This is a common error that usually happens when you try to run your webmap app on IIS. It is cause because you have not properly installed all the ASP.NET components for IIS.
For more details see: https://mrojas.ghost.io/iis-internal-server-error/