Vitis Model Composer uses the IP catalog compilation type as the default generation target.
The IP catalog compilation target allows you to package your Model Composer design into an IP module fo inclusion in the Vivado IP catalog. From there, the generated IP can be instantiated into another Vivado user design as a submodule.
Model Composer first generates an HDL NetList based on the block design. If there are Vivado IP modules in the design, Model Composer copies all necessary IP files into a subfolder named IP. Finally, all the RTL design files and Vivado IP design files are included into a ZIP file that is placed in a subfolder named ip_catalog.