While it fixes the issue, I don't know if it's the cleanest way to do it (repeatedly calling set-face-extend on the same faces every time an Org buffer is opened/reverted seems a bit silly). Also, while this is not part of the report because Erik's example happens not to have any text between the block delimiters (#+begin_src and #+end_src), I would like to re-emphasize that I'm pretty sure org-block (and maybe org-quote and org-verse) should be defined with :extend t unconditionally, to maintain the "rectangular" aspect the blocks have in a browser once exported to HTML: