If there is only one file then it is extracted into the current
directory. It makes sense to extract multiple files into a directory
like it currently does. To move the files from the created directory to
the current directory one simply has to cut/paste them, whilst to do it
the other way around would require making a folder, knowing what files
were in the directory, selecting them individually with ctrl-click then
cutting/pasting them into the directory. I like it how it is, but if you
insist then perhaps "Extract" rather than "Extract Here"?

-- 
"Extract Here" context command in nautilus extracts archive in 
<archivename>_FILES directory rather than current directory
https://launchpad.net/bugs/52473

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