As PG uses the terms,
I believe that "compressed" refers to data reduction (for example, mp3).
"Uncompressed" is in the form of the original recording (like a CD).

If it were just a matter of compression, the files could then simply be
uncompressed, like a zip file. And then there would be no difference.

File compression, as I usually see the term used, preserves everything.
The original file can be reconstructed right down to the last bit.
I don't think PG uses the term this way, but instead means data reduction,
so there would be some loss of quality.