From what I can gather, this is poorly phrased as it doesn't mean 'Number of extra lower division teams to be promoted (compared to those being relegated)' and it actually means 'Number of extra teams in this division next season'.
So if, in the second tier, three teams are promoted with no teams being relegated from the first tier, while four teams are promoted from the third tier to the second tier with no teams being relegated from the second tier, you have to set 'Number of extra lower division teams to be promoted' to 1 rather than 4.
However, how does this work when you're promoting teams from an inactive division?
I have a third division which, as it promotes two teams to the second division (with no teams relegated from the second division), promotes two teams from the fourth division, keeping the number of teams in the third division the same.
However, the editor doesn't like all three possible setups for the third tier (extra teams set to 2, extra teams set to 0 or extra teams unchecked) and it won't verify the file as it can't find enough teams for third division in the second season.
Testing in game it MOSTLY works fine. However, on occasions, it will choose to add a side's under 19 team to the third division, will 'promote' a team from the fourth division while technically keeping them in the fourth division (they're still listed as a fourth division side if you view the list of clubs under the nation), or will promote a team from the fifth division instead, despite me having set the division for relegated teams (with 0 relegation spots) to the fourth division.