The fact it works for you in Firefox and not Safari strongly suggests it is a browser issue.
For me it works in all the browsers I have available. (Safari(15.1), Firefox, Chrome). In Safari it works whether the above setting is ticked or not. Just that one saves it as a *.zip and the other as a no-suffix text file (i.e. a ged file without the .ged suffix). The latter, I suspect, is because I didn’t have .ged in the file name set for it in kiwitrees.
So I can only guess that it’s an older problem with your version of Safari.