Yes, it's extending. As well as being impossible optically without some DO or other trickery, you can see the inner barrel at the front of the lens. When everyone realises it's not an internal-zoom sealed unit, a lot of the excitement will evaporate and I'd even go so far as to say it's a mistake with an L-grade 70-200 unless it's incredibly light. While Canon will have done what they can on that, a 70-200/2.8 simply needs a lot of heavy glass. Weight is the problem, not the closed length, hence the appeal of the f/4 variants IMHO.
I used to have the Canon 70-300 DO, an expensive lens but very short at 70mm and I wanted it to fit neatly into a bag I was using (poor reason!). It was very fat, heavy, had a big wobbly extension at 300mm making it just as long as any other 70-300, and the barrel tromboned out at every opportunity when pointed down. I hated it. The small closed length was nothing but an illusion really, and extending barrels do nothing for weather sealing either. Canon seem to have learned from that though, and the more recent extending 70-300L and 100-400L designs are excellent.