I think you're talking about the extraction feature that came with ZIP folders. Aside from being clunky it's also rather inefficient and slow, it doesn't have any provisions for handling issues like mojibake, and is generally just not very robust. So why? AFAIK it's because the ZIP Folders/Visual ZIP code was basically integrated with Windows and then never updated. When it shipped in Windows XP (and possibly earlier, but I don't remember for sure) I think it was perfectly serviceable... it just didn't improve much over time.

I can't really stomach Windows 11 so I don't personally use it but my understanding is that the latest version of Windows 11 has finally integrated a better solution, implementing archive extraction based on libarchive.