[[Wikilinks]] are off and I remapped Add internal link to shift + crtl + k. Here I create three links; one to the Start Here.md and two to not-yet-created notes. (Sorry about page preview pop-up!)
Oh wait - it’s not creating the .md at the end of the note name. Is that what you mean?
If the note doesn’t exist yet, could you not just ctrl + k (Insert Markdown link) and type out the ABC.md filename yourself?
If the destination link (file) doesn’t exist yet, Obsidian has no idea if you want the link to end in a .md, .jpeg, .canvas, etc, file. Most of the time you’d be linking to a .md file, but maybe not.
While it would be nice to have it default to ending in a .md, I think this is expected.