"Name encoding" menu can be opened from "Options" menu or with Ctrl+E keyboard shortcut. It allows to select encoding for archived file names. This selection affects archive browsing and extraction commands. Normally you should prefer "Default" item, enabling WinRAR to choose encoding based on Windows language settings and knowledge about typical archive format parameters. But if "Default" based result is not satisfactory, you can select other encodings from list of code pages provided in this menu.
User made selection is active until WinRAR is closed or another selection in this menu is done. If you wish to save the current menu selection permanently, choose "Save current" menu item. Do it only if you need to process a lot of archives utilizing the same code page, which cannot be recognized by WinRAR automatically, otherwise "Default" is the better choice. You can always restore "Default" by selecting it in the menu and choosing "Save current" menu item.
If archive contains Unicode file names and WinRAR can reliably detect it, WinRAR ignores a value selected in this menu and uses Unicode names. "Name encoding" menu is used if no Unicode names are available or if encoding cannot be detected for sure. While this menu is accessible when browsing both usual and archived files, a selected code page affects only archived file names and ignored for usual not archived files.