The image on the right, shows a folder that contains archive files (zip in this case), and their contents extracted to a folder with the same name. Compare Advance calls these type of folders "Archive folders", because they are simply an extracted copy of an archive file.
Now when it comes to backing up this directory, you don't really want to backup the archive files and the archive folders as well - they are simply a duplicate of the archive files, so it would be a waste of space to backup up both. "But", you may ask, "what if the archive folders contain something different to the archive files? Maybe something was added or modified?"
Compare Advance allows you to exclude Archive Folders from the file list of a given root folder, while at the same time allowing you to include any files that may have been added or changed in the Archive Folder compared to it's source archive file.
This feature can save you many megabytes of space when you have a folder containing lots of zip files and their corresponding archive folders!