https://sourceforge.net/p/sevenzip/discussion/45797/thread/de3b8141/ Whenever I create an archive, the .tmp file is created at the source location, not the destination location. That means that creating archives of files on size-limited drives is often impossible, plus there is a costly inter-drive move that is totally unnecessary.
If this is still a problem, which archiving tool are you using? With file-roller I see this seems to work like you prefer, creating .7z archives will create an invisible directory in the destination.
thunar-archiver-plugin just calls the archivers (i.e. file-roller and ark) passing parameters as you would do in the shell. See the tap scripts at: https://git.xfce.org/thunar-plugins/thunar-archive-plugin/tree/scripts So, not fixable on our side.