Most MIDI players, keyboards, software, sound cards support this kind of MIDI compression.
MIDI Compression does not change the musical content, it still produces valid standard MIDI files, but reduces MIDI file size (up to 15% smaller).
Most files that are found in Internet or sold by music companies are compressed.
Usually this option should be checked (ON), since it only uses capabilities that MIDI standard suggests.
Turn this operation off when your MIDI device does not accept format 0 MIDI files that are compressed.
Some older Yamaha keyboards seem not to support compression and reject valid MIDI format 0 files at loading.