I don't think the variable-length encoding itself is the author's concern, it's adding additional filters later without an overall version number. Unlike long file names in FAT32, adding additional filters is not backwards compatible. With a version number, it's super clear what can decode a file. Without, your xz file is only decodeable if your decoder implements the same set of filters as the encoder, rather than the much simpler approach of gzip where any gzip decoder can decode any gzip file.