In the FAQ for it, it says it compresses the files. It says this process is fast, but "fast" may not be fast enough for a rhythm game. Even a small increase in load time, could create audio desync in osu!. I'm not completely convinced it would be beneficial. Also doesn't this mean that everything would be saved under their format and not .osz2? I don't think you could take any format and be able to use their format technique without having to overwrite your own, and that means you would have to deal with their security vulnerabilities. If .osz2 is supposed to protect the files from being extracted, this could be a way they can easily hack into it.
This will process all supported files added, and overwrite them with the optimized version.
I noticed FLV isn't supported...
Anyways I don't think that the game should automatically be "optimizing" files. There is always the risk of corrupting file data when you start internally moving things around and you just don't know how it will affect certain renderers. I have mp3s that osu can't recognize. If osu just happens to corrupt the mp3, there's not like peppy could afford the server space to keep a backup of filedata in case of corruption.