Whether you should keep English Extension 2 is dependent on two factors, the first being whether you would be prepared to drop a subject that you were extremely excited to take and the second being whether you strongly believe that you can improve your position by performing well in your upcoming school-based assessment tasks for this subject. The fact that you are passionate about this subject could suggest that you would be open to considering keeping this subject since the option of dropping it implies that you are taking more than 10 units and that English Extension 2 may not necessarily count towards your ATAR (assuming it ends up being your worst performing subject). While not a very practical option, it would still allow you to experience the subject that you were hoping to take for so long. Of course, keeping it with the aim of improving your performance is naturally a better course of action.
Your rank for English Extension 2 (and your other subjects for that matter) is determined through your performance in your school-based (internal) assessment tasks, such as the Viva Voce. Your rank is used to determine your Assessment Mark, being the mark that reflects your internal performance and contributes 50% of your HSC mark (final mark) for this subject. Examination Marks (external marks) are also used in this process. In your case, if your final rank remains 6/6, your own Assessment Mark will be adjusted to equal the lowest external mark of any student in your cohort. From this point, the higher your rank, the higher your Assessment Mark is likely to be.
However, this does not extend to your performance in your own external component for this subject (i.e. your Major Work). This means that, if you perform favourably in your Major Work, you will receive a favourable external mark regardless of your rank relative to your cohort. With that being said, your external mark would still be used in determining the Assessment Mark of another student in your cohort. For example, if your Major Work ends up getting you the highest external mark in your cohort, the Assessment Mark of the student ranked first will be adjusted to equal your external mark.
I hope this helps!