The Zip specification does not specify what character encoding to be used for the embedded file names and comments. The original IBM PC character encoding set, commonly referred to as IBM Code Page 437, is supposed to be the only encoding supported. Because of this, some zip utilities will not allow storing file names or comments with Unicode characters. Others do allow it, but those file names and comments may not be read correctly by other utilities.
Setting the UseUtf8Encoding to true causes C1Zip to store and retrieve file names and comments using the Utf8 encoding, which allows Unicode characters. The caveat is that Unicode file names may not be read correctly by other zip utilities.