Utilizing CSOM and Power Automate for ZIP decompression and file upload are not optimal for large files with deep folder structures.
The SharePoint Migration Tool (SPMT) is primarily designed for migrating content from on-premises SharePoint sites and file shares to SharePoint Online. While it excels in bulk data migration scenarios, it doesn't specifically cater to the real-time extraction and organization of ZIP file contents. Therefore, it may not be the most suitable choice for your use case.
For a scalable and efficient solution, consider implementing Azure Functions in conjunction with Azure Blob Storage.
Azure Blob Storage: Store the uploaded ZIP files in Azure Blob Storage. This service is optimized for handling large files and offers high availability and scalability.
Azure Functions: Develop serverless functions that trigger upon the arrival of a new ZIP file in Blob Storage. These functions can efficiently extract the ZIP contents, maintain the folder structure, and upload the files to SharePoint Online using CSOM or the REST API.
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