Solution Packager is a tool that can unpack a compressed solution file into multiple XML files and other files, so they can be easily managed by a source control system.
Unmanaged solution: An open solution with no restrictions on what can be added, removed, or modified. This is recommended during development of a solution.
C: Managed solution
A completed solution ready to be imported into an organization. Once imported, components can't be added or removed, although they can optionally allow further customization. This is recommended when development of the solution is complete.
Reference:
https://docs.microsoft.com/en-us/power-platform/alm/solution-packager-tool