Preheat oven to 350°F. Line two baking sheets with parchment paper.
In a medium bowl whisk together flour, baking soda, baking powder, and salt, then set aside.
In a microwave-safe bowl melt 1/4 cup butterscotch chips in 15 to 20 second bursts, stirring between each, until smooth, then let cool for 5 minutes.
In a large bowl beat 3/4 cup softened butter, granulated sugar, and brown sugar on medium speed for 3 to 4 minutes until light and fluffy.
Add the melted and cooled butterscotch to the butter mixture and beat on medium speed for 1 minute until combined.
Beat in the eggs one at a time, mixing well after each addition until smooth.
Mix in 2 tsp vanilla bean paste, 1 tsp butter extract, molasses extract if using, and cream soda until the batter is smooth and glossy.
With the mixer on low speed gradually add the flour mixture and mix just until combined with a few streaks of flour remaining.
Use a spatula to gently fold the dough until no dry spots remain; the dough should be soft and slightly sticky.
Cover the bowl with plastic wrap and refrigerate the dough for 30 minutes.
Scoop dough into 2 tablespoon portions and roll into balls, then place on prepared baking sheets about 2 inches apart.
Bake for 10 to 12 minutes until the edges are set and lightly golden while the centers look slightly underdone.
Cool cookies on the baking sheets for 5 minutes, then transfer to a wire rack to cool completely.
For the frosting, melt 1/4 cup butterscotch chips in the microwave in 15 second bursts until smooth, then cool for 5 to 10 minutes.
In a large bowl beat 1/2 cup softened butter on medium-high speed for 2 to 3 minutes until pale and fluffy.
Add 2 cups powdered sugar and beat on low until combined, then on medium-high for 2 minutes.
Add the cooled melted butterscotch, 1 tsp vanilla bean paste, 1/2 tsp butter extract, pinch of salt, and 2 tbsp cream, then beat until smooth and fluffy.
Beat in the remaining powdered sugar, 1 to 2 cups, until the frosting is thick but spreadable; add the remaining 1 tbsp cream if needed to reach a smooth consistency.
Beat frosting on high speed for 2 to 3 more minutes until very light and fluffy.
Once cookies are completely cool, spread or pipe frosting on top of each cookie.
Drizzle frosted cookies with butterscotch sauce if using, then serve or store.