A PSD cannot be viewed by anyone without Photoshop or a compatible editor. JPEG XL gives excellent quality for its size. PSD is at home in work-in-progress designs with layers; JXL is the usual choice for high-quality photo archives.
The defaults suit most files. Under Options you can set the quality and resize the result.
The PSD is converted as one flattened picture, with its layers merged; files with more than 8 bits per channel are not supported yet. The JXL encoder is a WebAssembly module that downloads the first time you convert to JXL and is cached afterwards.