This happens because when you use the LZ (LSMALL, LZMEDIUM, LZLARGE, LZRW3) and Huffman compression routines you need to specify MAXPACK=31744 , PACK=LENGTH and RECSEP=NO. Setting RECSEP=NO and PACK=LENGTH will turn on large packing.
These compression routines must use a buffer with at least 500 bytes in order to be efficient. If XCOM detects that PACK=LENGTH is not specified and the value of MAXPACK= is not set to 31744 , it will negotiate compression down to COMPRESS=YES. RECSEP=YES must be specified with PACK=LENGTH or you will get the error message XCOMU0448E Type of Record Packing not Supported and the transfer will end with an error.
You can set the value of MAXPACK= in the config member or XCOMDFLT table or in a destination member for that partner receiving the transfer.