It was pretty clear that the 4th disk of FFVIII was rushed and everything that didn’t involve the final dungeon was just sort of thrown together at the last minute. Ultimately, the only reason the world map was still there is so you could obtained some GFs that would have been otherwise miss-able and level up. The light around the towns was just another way of the developers saying “we didn’t have time to add them back on this disk but if anyone asks it’s due to Time Compression…or something.”