I'm the author of the extension. Browsers don't offer a way to register a (browser) extension with a given mime-type or filename extension. That's why SingleFileZ uses the HTML format to wrap the zip content.

Quick question, can I also use this to serve a webpage?

As in take a website I am developing and have my server serve SingleFileZ instead of what I would usually.

Yes you can. See this page for example: https://gildas-lormeau.github.io/ (check the source code of the page if you're curious). It was saved with SingleFileZ and is served via a HTTP server. Note that you don't need any extension to view it in modern browsers.

On paper, you could even store an entire website in a SingleFileZ file. It just need to be implemented...

That would be great! I know of a few scenarios where HTTtrack and SingleFileZ would save a lot of space and effort.

It wasn’t very clear from the page why, but on the SingleFile repo page there’s a comparison table between different formats that may shed some light in this: https://github.com/gildas-lormeau/SingleFile#file-format-com...