Conversion-type transition metal oxides (TMOs) have emerged as promising anode materials for lithium-ion batteries (LIBs) owing to their high theoretical capacities and low cost. Intriguingly, many TMOs exhibit extra capacity that surpasses the limits predicted by conversion reaction mechanisms, challenging traditional electrochemical models and offering opportunities for next-generation high-energy storage. This review highlights the phenomenon of extra capacity in TMO anodes, emphasizing its mechanistic origins and practical implications. While these materials face well-known challenges such as low initial coulombic efficiency, solid electrolyte interphase (SEI) instability, and severe structural degradation due to large volume changes, they offer promising opportunities for achieving high energy density. Special emphasis is placed on understanding the underlying mechanisms that contribute to this anomalous capacity, including the role of reversible SEI formation, lithium-rich phases, reversible formation of LiOH, and interfacial storage phenomena. By clarifying these mechanisms and performance-enhancement approaches, this paper aims to guide future research toward the practical application of high-capacity conversion-type TMO anodes in next-generation LIBs.