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When the OTA2_example application is build by making the target as "snip.ota2_example-<platform> download ota2_image run", the example get is build and downloaded to the current application area of your device. Now if hold the reset button for >10 sec, the ota2_extract application comes into picture and extracts the factory reset application. Now by default the factory reset application is scan application which should run.
In your case the factory reset image is not valid or present and so extraction is getting failed. You can proceed by downloading a factory reset image before downloading ota2_example application. Section 10 of the OTA document refers to building an ota2 factory reset image + dowmload to FALSH ota2 factory reset Area at the end of build. To generate+ download a factory reset image, make the target as follows:
Failsafe application: If the device resets while OTA2 extraction, the device could be in an unknown state. There is a OTA2 failsafe application which gets loaded with OTA2_bootloader that can restore the system to valid ota2 image in staging area or factory reset image.
If your device resets or power cycles during factory reset image extraction, the failsafe application will take over and extract the factory reset image on power up.