I'm not sure if there is already a thread for this exact thing (I've read some that are close) but I am having a bit of an issue. I have a HDMI extender (Amazon basics - works fine with other things) and the USB extension cable that comes with the Rift S. My husband can use these without issue; however, when I use it, the environment within VR becomes distorted. The fact that he can use them without issue makes me feel as though it is an issue with my computer. It makes it look like I am under the world, even after resetting the guardian/settings and the height of everythig is off. Additionally, it makes me set up the guardian every 5 seconds. The same thing happens when I use the HDMI extender as well. Without either of the extenders, it works fine. We have a rather large area of the basement that is used for the play area and without these extensions, it makes it really difficult because my setup is a little further back from the area and I am not able to move it without completely moving my setup (which I would realllllllly rather not do). I mean, it's usable, but you know, lol.
You mean Display Port, right? A Rift S doesn't have an HDMI interface. How long is your USB extension cable? Can't remember off the top of my head what the max distance is but depending on whether you're using a USB 2 or 3 cable, this max distance will be vary. If you're close to this maximum length, you'll start seeing some problems.
My first suggestion would be trying a powered USB hub. The Rift-S is a notorious power hog, motherboards can struggle to keep up. That will make tracking fail.
Even if it doesn't work, the hubs are useful for other things if you only have 4 usb 3 ports. 🙂