Kevin,
I think the error regarding extent simply means that the processing extent is invalid. It could be that whatever extent you had defined (or defaulted to) in the simple model was OK, but something in the more complex model has changed the processing extent.
I'm not quite yet using Pro, but I assume the concepts are the same as in Deskstop.
I was once working on a project using Batch Point processing and it would run but the results would be cut off in a rectangle that I eventually realized happened to be the same as the extent of my Batch Point dataset. I think this was a bug in Arc Hydro where it would reset the processing extent to match the Batch Points (or when it reset the extent based on the layers involved it only used the Batch Points). My solution was to set the processing extent in Model Builder to be that of a "mask" layer that I used to extact the limits of the DEM I was using (to reduce memory requirements).
Additionally, in the Desktop version of Arc Hydro, there is the Batch Point option. When you create Batch Points you can run Batch Point processing. This likely does exactly what your model iteration does, but since it is w/in the Arc Hydro set of tools possibly it could reduce errors or "pass-on-ability" of your work (the next person won't have to decipher your "code").
Hope this helps,
Mark