Data that is in gtf.gz format is automatically uncompressed to gtf during Upload. There is no datatype for gtf.gz – so it wouldn’t be possible to have a dataset with gtf.gz assigned as the datatype. This means there is nothing to implicitly convert compressed to uncompressed at runtime.
If you are not working at a usegalaxy.* server, maybe test out the upload of the data at one of those to better understand the default/supported behavior? Allow Galaxy to autodetect the datatype.
Other Galaxy servers, public or private, may have different custom datatype configurations added, or be running a (much) older Galaxy release, or be running a customized version of this tool. Those admins/tool developers would be the best people to contact if you want a change that fits the custom server environment you are working in.
Thanks!