HI @jwdebelius, @Mehrbod_Estaki,
extract-reads handles degenerates correctly. The local aligner from skbio that we use has some ... interesting behaviour regarding degenerates, but from memory we worked hard to work around them.
The answer to your question is in —p-identity:
--p-identity NUMBER minimum combined primer match identity threshold.
[default: 0.8]
So the mismatch threshold is defined as a fraction of the combined lengths of both primers, and is applied to the mismatches accumulated across the primers.
I am not saying that there is a biological justification for that behaviour, but that is what it is.
I have been intending for some time to revisit this method. Last time I tried my favourite in-silico PCR simulator was ipcress. Who knows, this summer I may get around to implementing a wrapper for it.
Cheers,
Ben