There may be some underlying issues with respect to apps here. I just replicated using WinRAR and Winzip. Neither added the additional directory when zipping. I then unzipped both (on a windows machine and on my *nix server) and neither added the additional directory. The server side info for the unzip I am using is appended below.
For further clarification, I downloaded the zip from the moodle and extracted, which created a dragmath directory with a lib directory below that. I opened the dragmath folder, rightclicked the lib folder and selected "Add to archive" (also used "Add to Zip file"). In the dialog that opens I set the archive up as a ZIP and the backup as relative path.
So, before we go any further could you verify your steps as compared to mine and check the version of unzip you are using on your server?
UnZip 5.52 of 28 February 2005, by Debian. Original by Info-ZIP.
Usage: unzip [-Z] [-opts[modifiers]] file[.zip] [list] [-x xlist] [-d exdir]
Default action is to extract files in list, except those in xlist, to exdir;
file[.zip] may be a wildcard. -Z => ZipInfo mode ("unzip -Z" for usage).
-p extract files to pipe, no messages -l list files (short format)
-f freshen existing files, create none -t test compressed archive data
-u update files, create if necessary -z display archive comment
-x exclude files that follow (in xlist) -d extract files into exdir
modifiers: -q quiet mode (-qq => quieter)
-n never overwrite existing files -a auto-convert any text files
-o overwrite files WITHOUT prompting -aa treat ALL files as text
-j junk paths (do not make directories) -v be verbose/print version info
-C match filenames case-insensitively -L make (some) names lowercase
-X restore UID/GID info -V retain VMS version numbers
-K keep setuid/setgid/tacky permissions -M pipe through "more" pager
Examples (see unzip.txt for more info):
unzip data1 -x joe => extract all files except joe from zipfile data1.zip
unzip -p foo | more => send contents of foo.zip via pipe into program more
unzip -fo foo ReadMe => quietly replace existing ReadMe if archive file newer