Windows tests that reproduce this issue would be ideal! I can work on testing on Windows if needed.

See #168. I read actions/toolkit#1287 more carefully. I'm disinclined to add a workaround here for @actions/* for a specific Windows self-hosted runner configuration. Especially for outdated versions. I don't know much about PowerShell but perhaps it would be possible to shim that command to do the renaming you want.

I looked into shimming, and it would be possible to workaround this problem with something like the following in a Powershell profile:

function Expand-Archive($path) { 
  if ( $path -NotMatch ".zip$" ){ 
    Move-Item "$path" "${path}.zip"
    powershell.exe -nop -c Expand-Archive "${path}.zip"
  } else {
    powershell -nop -c Expand-Archive $path
  }
}

we ultimately decided to go ahead and install Powershell Core by default on all our self-hosted runners.

since my team has landed on a different solution, I'll close the PR.