Yes, the legs on the Osmo Base for Fire tablet do need to be extended when using the newest thin bezel Fire tablets: the Amazon Fire HD 8 (10th Generation) or Amazon Fire HD 10 (11th Generation). In order to extend the base legs, you need to pull the legs out while keeping the buttons pressed.
Please see this video for a demonstration.
The instructions for whether to extend or shorten the base legs are also part of the setup steps presented at the launch of each app.
You will also need to use an Osmo Reflector for Fire Tablets (2021) or a reflector adapter.