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Al's picture

The 'Z' format indicates that the time is in 'Zulu' format (basically UTC), as defined by the GPX file standard.  The other option adds the time zone offset, but as it is non-standard some software fails to read it as you've found out.
As you suggest I'm going to add an option to save the file with local time stamps, although this isn't in the standard it will give a bit more flexibility when importing tracks.