Hi Mohanish.
This is because the tflite model storing the pruned elements without changing their data type. But the modern compression algorithms pretty efficiently compresses the zero values, so it can reduce the model size after compression.
Yes, the compression might need to undo before the execution, however, considering the tflite is designed for mobile/ioT devices, the model is usually compressed while delivering and storing it to the device.  So it is meaningful to have reduced (compressed) model size.
hope this help, any more discussion is welcome!