The line is heading towards being split at Kennedy. What this will mean is the better option will just be to grade separate the section east of Science Center, and put it out of it's misery.
The "explanation" being given is that the SSE wasn't designed in a way to easily allow for an eastern extension to Line 5, and as such making 1 continuous line will be expensive and time consuming. However, Metrolinx almost immediately made a statement saying that none of this is true. Given that the city of Toronto has a pretty lengthy history of, let's call it smudging, data to push a specific alignment or design decision that they want to build I'm more willing to believe Metrolinx in this case. The actual reason has likely more to do with making the extension cheaper by allowing them to run smaller trams, and thus save money by not burying certain stations namely Midland and Lawrence-Kingston-Morningside.