`"jsx": "react"` is not working in a particular situation

[kimamula]

TypeScript Version: 2.1.4 / nightly (typescript@2.2.0-dev.20161224)

Code

Compiling the below code

import * as React from 'react';

declare function createComponentClass<P>(factory: () => React.ComponentClass<P>): React.ComponentClass<P>;

class Foo extends createComponentClass(() => class extends React.Component<{}, {}> {
 render() {
 return <span>Hello, world!</span>;
 }
}) {}

with compiler option

{
 "compilerOptions": {
 "jsx": "react"
 }
}

results in

"use strict";
var __extends = (this && this.__extends) || function (d, b) {
 for (var p in b) if (b.hasOwnProperty(p)) d[p] = b[p];
 function __() { this.constructor = d; }
 d.prototype = b === null ? Object.create(b) : (__.prototype = b.prototype, new __());
};
var React = require("react");
var Foo = (function (_super) {
 __extends(Foo, _super);
 function Foo() {
 return _super.apply(this, arguments) || this;
 }
 return Foo;
}(createComponentClass(function () { return (function (_super) {
 __extends(class_1, _super);
 function class_1() {
 return _super.apply(this, arguments) || this;
 }
 class_1.prototype.render = function () {
 return <span>Hello, world!</span>;
 };
 return class_1;
}(React.Component)); })));

Expected behavior:
<span>Hello, world!</span> is converted to something like React.createElement("span", null, "Hello, world!");.

Actual behavior:
<span>Hello, world!</span> remains as is, though the extension of the emitted file is .js.

[rbuckton]

Apparently we are not checking the extends clause (specifically an ExpressionWithTypeArguments) when we determine whether to transform JSX.