The Separate/Combine toggle controls the way that ZipOut compresses attachments. There are two ways that ZipOut can handle a message containing more than one attachment. Choose Separate if you want to create a separate .zip file for each attachment, or Combine to put all the attachments into a single zip. Keep in mind that files with excluded extensions are not affected by ZipOut, and will not be included in any combined zip files that are created.
Note ZipOut will persist in the Separate state for all subsequent Outlook Items until you toggle the command button back to Combine.
If ZipOut is set to combine attachments then by default zip file will use the name of the first compressible attachment in the message. You can override this behavior globally by entering the Filename for combined attachments under Send Attachments Settings. You can also specify the name of the zip file for an individual message by opening the ZipOut Options dialog for that message and supplying a Combined attachments filename. The first attachment is typically at the top left of the message body. If you use the Insert File command (paperclip icon) on an Outlook Inspector to insert attachments into the body of an Outlook Item, the first file you select in the Insert File dialog box will be the first attachment in the body of the Item. You can select multiple files in the Insert File dialog box by pressing the Ctrl key while you select files in the dialog box.