If you're interested in going down the rabbit hole, as far as I'm aware the concept first came up in Guy Debord's The Society of Spectacle. It's a bit of a weird read though.
The term did take on a wider meaning in political philosophy and critical theory since, however.
Now that I think about it, Embrace Extend Extinguish can be understood as the explicit application of the process recuperation to the free software counterculture.
This process is called recuperation in sociology : https://en.wikipedia.org/wiki/Recuperation_%28politics%29?wp...