This is not a specific criticism of GNOME -- I've never noticed *any* platform having a folder picker UI that works well.

To see how awful it is:

1. Open a zip file in the archive manager.
2. Click "Extract"
3. Do any of these things:
3a. Type /some/path/that/exists into "Location" and press enter because you want to change the view to that path (like it would in the file picker).  Curse because you just extracted the entire archive there instead of seeing the folder in the picker.
3b. Go to your home directory.  Click (once) any subfolder by mistake.  Decide to extract *into* your home directory.  Clicking Extract will extract into the subfolder you single-clicked (but the only way you'd know that is because you've been burned before).  (Hint: control-clicking to unselect will work.  This is pathetic.)
3c. Try to use the keyboard instead of the mouse.  By the time you tab your way to the "Extract" button, you've probably already selected a subfolder, leading to the same problem in 3b.  Except that you can't control-click without resorting to the mouse.

FWIW, it's not obvious to me how to fix this, but the current state of affairs sucks.