The issue here is lack of forward compatibility: the old version 3 program not being able to read files created by the version 5 program.

This is not so different from a Windows 10 program not being able to run under Windows NT 3.5. E.g. due to using some new API that doesn't exist.

However the zip files created by Windows Explorer can be opened without problems in Windows 95 (with additional software, OS support was only added 19 years ago in Windows XP). Similarly Excel 2019 still has an option to safe your files in the Excel 97 format. When it comes to file formats Microsoft is very dedicated to both backwards and forwards comparability, and companies love them for it.

Sure, the zip format hasn't changed much in 30 years, ok.

The Stuffit format was also never owned or even licensed by Apple, it was just a third-party vendor who's proprietary (non-standards-based) compression format became popular on pre-OSX Mac OS. But yeah, that vendor chose to make some changes to it to improve it, such that archives created by later versions could not be opened by previous versions, unlike Microsoft's practice I guess.

But as long as we're comparing... the target OS for this converter is Mac OS System 6, released in 1988, superseded by System 7 in 1991. In 1988, Windows 2.0 was released, windows 3.0 was released in 1990. Can zip files created by Windows Explorer be opened without problems in Windows 2.0? I mean, sure, if the format hasn't changed I guess so?

Googling though.. it looks like if you are creating a zip archive using WinZip, they recommend you choose a "legacy compression setting" if you want to be sure it'll be compatible with older versions. Otherwise it may not be. I'm guessing Windows 2.0 is about as older version as it gets. https://support.winzip.com/hc/en-us/articles/115011349147-Is...

I wonder who's still running Windows 2.0 to find out! I also wonder who's still running Mac OS System 6!

That's great, but in the case of zip files it's because the file and compression format hasn't materially changed since the 1980s, and in the case of Excel because Microsoft controls the format. Apple does not control the Stuffit format and never has (and AFAIK never distributed their own software using Stuffit). Stuffit's compatibility issues are due to the people who make -- or at this point, I believe made, past tense -- Stuffit.

StuffIt is third party software (Aladdin, now Smith Micro)