For the longest time, the OAuth extension was OAuth 1 only. Since OIDC requires OAuth 2, we implemented our custom OIDC-like authentication method instead. Now that we support OAuth 2, we should fix that; OIDC is a widely understood web standard while our custom fork isn't, and it probably doesn't take a lot of effort to support at least the core part of OIDC.
Note this is unrelated to MediaWiki-extensions-OpenID-Connect; this one is about making MediaWiki into an OIDC provider, that one's about using a remote OIDC provider to log into MediaWiki.
tl;dr of the comments: the OAuth extension implements a subset of the core OIDC spec's functionality; it's not technically compliant, but it might be compliant enough to work in practice, depending on which of the several possible workflows a client tries. Authlib, for example, works with Wikimedia wikis, without needing a custom MediaWiki plugin. Feedback on other OIDC clients' compatibility welcome.