Difficulty installing privileged extension on LineageOS 14.1/Hammerhead

I have troubles getting the privileged extension installed on my LineageOS device.

I got the OTA zip (2060, then 2070), and installed it through the bootloader. I see directories /system/app/FDroid and /system/priv-app/FDroidPrivilegedExtension have been created, but both are empty. I have repeated the process several times, with two different version of the OTA zip, but I keep getting the same result, and FDroid still installs apps and updates through the system API rather than directly.

I'm sure I'm missing something trivial, but can't work out what. Any suggestion is welcome.

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