That option is fairly technical… It is only required if a single file inside the zip archive is greater than 4GiB uncompressed. It does not matter how large the zip file is, so you can store many 2GiB files and have a 4TiB zip file without the flag.
It was added as a user reported issues having the dlist exceeding 4GiB (i.e. there was a lot of files).
Enabling the flag by default stores a bit of extra header information and makes the zip file use the Zip64 specification. IIRC it adds around 16 bytes pr. file (i.e. block from Duplicati) in the zip archive. I think that overhead is unwanted for most users, but I would not object to making it default- on.