It temporarily increases the extensibility of the muscles. This is the permanent lengthening of soft tissue. This is seen more in ligaments than any other soft tissues. Once a ligament is stretched, as in the case of a joint injury, it will never be as taunt as it once was. Chronic flexibility exercising can also stimulate plastic elongation, which is not necessarily a bad thing.
Plastic elongation is bad when the integrity or stability of a joint is affected.