The operation of Create m3u files depends on whether Yate is operating in Album Mode or Playlist Mode. More information on open modes can be found here.
When in Album Mode, the function will create m3u files in each folder containing files in the current selection. Only files in the current selection will be represented in the created files. If the album name is unique for each represented folder, the created file will be named album name. If the album name is not unique, the created file will be named Yate.
When in Playlist Mode, a file save dialog will appear where you select the name and location of the file to be produced. The produced file will contain an entry for every file in the file list regardless of the current selection.
When producing the file, Yate will save it with a .m3u extension if the contents of the file can be saved with the Latin1 encoding. If the filenames contain non Latin1 characters, the file will be saved as a UTF8 file with the extension .m3u8.
Yate writes the files with relative paths whenever possible and if not uses absolute paths. A produced file will contain all relative or all absolute paths.
Note that the Create m3u Files action statement has more capabilities than this UI based method.