Decompression is independent.
Compression requires WinRAR as there is no other way to compress RAR files* (only WinRAR.exe or RAR.exe). There is no RAR compression library/component which other applications can use. Even if someone wanted to pay to licence one; it doesn't exist. This is why most tools treat RAR as read-only (or require the RAR/WinRAR tools for compression).
(*There was another tool a long time ago, which I think reverse engineered the compression algorithm, but it hasn't been updated in 10-20 years and wouldn't produce the same output as modern versions of WinRAR.)
The archives plugin config lets you specify where to find WinRAR.exe if you want to keep a copy in a different place, e.g. for portable versions.
If you want something standalone, stick to the 7z or Zip formats, which don't suffer from that limitation.