1. Possible. No issues.
2. Your case is called bridge petition. Like your employer told you, your earlier filed petition should be approved along with this newly filed extension to be able to join the new employer.
3. No way for your current employer to know about this new H-1b extension.
4. Yes, then the bridge is broken and even if it's approved, you could not join them. But you raised a valid point if you could go out and get H-1b stamped for new employer and possibly could join them. That could be possible. I am not 100% sure about that option.