In the documentation it says that the -z option changes the default line delimiter, which is a newline character, to ASCII NUL. How exactly do you use that option? Take a look at this example please (the file is tab-separated):
$ cat data.tsv
John Doe 28 New York
Bob Smith 37 Boston
Jane Doe 31 Boston
$
$ cut -f1,3 data.tsv
John Doe New York
Bob Smith Boston
Jane Doe Boston
$
$ # This is the output I get:
$ cut -f1,3 -z data.tsv
John Doe New York
Bob Smith$
I can't make sense of that output. What exactly is going on there?
-z is for when your input is NUL-delimited instead of \n-delimited. It changes how cut processes the the input, and also makes it output records in the same format, with \0 line endings.
Your input data now is:
John Doe 28 New York\nBob Smith 37 Boston\nJane Doe 31 Boston\n
If it had NULs instead of newlines, you'd use -z:
John Doe 28 New York\0Bob Smith 37 Boston\0Jane Doe 31 Boston\0
When would this be useful? It's not for files as much as it is for pipelines. For instance, you could use find -print0 to output file names with \0 after each name. find -print0 allows you to process file names with embedded newlines—it is highly unusual, but newlines are legal characters in file names. \0 is never legal.
Then cut -z would be useful.
Similar flags in other commands include xargs -0, read -d '', and cpio -0.