In the header that's true, the body is plaintexted in the compression process, then is re-encrypted after decompression. The process works perfectly and files verify and hash fine after decompression.NCZ is just compressed NCA with untouched header. Encryption is still there untouched.
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My theory is games with a color palette that has few variation will compress really well, like hollow knight for example that uses colors to differentiate the different parts of Hallownest.4 % of original NSP size? How is that even possible, wtf.