You need to be clear if you are producing an
Instant App or a normal Android app. I think this is what is confusing you, or maybe you just aren't being clear in the question.
Android Instant Apps are special Android apps that launch from a web page, and don't need a user to install them. To build them you need the Instant Apps SDK, and to follow the development instructions
here. Android Studio will produce a zip for you, you don't need to do it manually
For normal Android apps, you don't need to zip your APKs. Just upload the APK itself to the Play Console.
I think you are probably making a normal Android app, but because you are zipping it, the Play console thinks you are uploading an instant app. So stopping Zipping your APK, and just upload it to the Play Console as a ".apk" file.