Verified that this is no longer an issue on 20.x, 21.x, 22.x or trunk/23
https://trunk-mysql.nightly.sakaiproject.org/, build 4eb23cb5
https://qa22-mysql.nightly.sakaiproject.org/, build f663a24c
https://qa21-mysql.nightly.sakaiproject.org/, build 881bc681
https://qa20-mysql.nightly.sakaiproject.org/, build 4c634903

This should be fixed by one of the following:

Needs retesting in 19.

Yeah, this is just an issue with the client, but it doesn't check again with the server until you either submit or go to the next page. So this among other reasons is why we recommend either just leaving the Question Layout (in layout and Appearance) to the default of one question per page, or at least splitting into parts and having each part on a separate page. There's too many potential issues without autosave/autosubmit having it all on one.

I also haven't checked but I believe if you had the autosave feature enabled the timer would also be corrected. But it would be nice to have the overall improved timer.

What I was seeing is that if you are on the page with the file upload and you click browse (I didn't even upload anything) and then close the browse box whenever you click the upload button it resets the timer back to where it was when you first clicked the browse button.  

When you leave that question the timer does continue but the question can be gone back to and the process repeated if additional time is needed for other questions.

Like said I have not checked whether or not the time has truly been extended or if when the time should run out the assessment just auto submits.

will need to confirm, but I believe that assuming you know the trick to reproduce, you can access the page with the File Upload question at any point during the assessment, add another file, then after the upload completes but before moving to another page, click Upload again (without actually selecting a file) and reset the timer... moving onto another page, you still have the additional time. Assuming the student did this several times to extend the timer, before manually submitting or allowing the timer thread to die, they could go back to the file upload question, remove any extraneous files, and the instructor might not notice the extra time logged.

I was not aware of this issue when testing other timer bugs, so I'm not too familiar with reproducing it and how well the "bonus time" actually works. Some infinite timer bugs give a student the illusion of being able to get extra time, but in fact their exam submits at the expiration of the original timer thread.