Last edited by Nagato,
The decompression mode of psvita-l7ctool is only for the TXP files. They have a specific format that includes the filesize in the header.
The tool should be automatically decompressing any data it dumps if you're using x mode, though. If you see a message at the beginning when you start it saying that it's an unsupported archive type, then it will dump raw data which seems to be in another compression format that I don't know and I most likely won't support.
.bin is just a generic extension.
All files should be getting compressed when you recreate the archive using the 'c' command. The tool will compress it automatically.
If it's not working then it's for another reason and most likely not the tool I think.
The tool *does* compress then when you use 'e', but it's a lazy compression. It's basically a fake compression which doesn't use any of the advanced features of the compression algorithm.
So, if the data doesn't work when you use the 'e' command, then it probably still isn't the tool I would assume.