It is possible for a compressed archive to be larger than its original folder due to several technical factors:

When dealing with large archives or extensive file paths, several limitations and bugs can occur:

Files that are already highly compressed (like .jpg images, .mp4 videos, or .exe executable images) often cannot be compressed further. Attempting to compress them again may only add overhead.

Some systems use hard links where one file appears in multiple places but only occupies space once. Most archive formats do not support this and will save each link as a separate, full-sized file, ballooning the archive's size.

Every compression tool, including 7-Zip, embeds metadata (file names, headers, and structure info) into the archive. For very small files or folders with complex structures, this overhead can exceed the space saved by compression.

Using the "Store" level with encryption will encrypt file contents without any actual compression, which may slightly increase the final size due to encryption headers. Issues with "Long Content" in 7z