What is the advantage of setting zip_safe to True when packaging a Python project?

Zip files take up less space on disk, which also means they're more quickly read from disk. Since most things are I/O bound, the overhead in decompressing the packaging may be less than the overhead in reading a larger file from disk. Moreover, it's likely that a single, small-ish zip file is stored sequentially on disk, while a collection of smaller files may be more spread out. On rotational media, this also increases read performance by cutting down the number of seeks. So you generally optimize your disk usage at the cost of some CPU time, which may dramatically improve your import and load times.

There are several advantages, in addition to the ones already mentioned.

Reading a single large .egg file (and unzipping it) may be significantly faster than loading multiple (potentially a lot of) smaller .py files, depending on the storage medium/filesystem on which it resides.

Some filesystem have a large block size (e.g., 1MB), which means that dealing with small files can be expensive. Even though your files are small (say, 10KB), you may actually be loading a 1MB block from disk when reading it. Typically, filesystems combine multiple small files in a large block to mitigate this a bit.

On filesystems where access to file metadata is slow (which sometimes happens with shared filesystems, like NFS), accessing a large amount of files may be very expensive too.

Of course, zipping the whole bunch also helps, since that means that less data will have to be read in total.

Long story short: it may matter a lot if your filesystem is more suited for a small amount of large files.