Apparently, Time Compression is making various parts of the world get screwed up and trapped in vortexes (if you beat the CC Club earlier in the game, Xu will run aboard the Ragnarok saying "Have you see what's going on out there? It's terrible!"). In reality, Time Compression is a convenient synonym for "Memory constraints", along with "Iifa Tree roots popping up to spread Mist over the entire world".