The Compact Display HUD gives you a little more information than the tradition Minecraft HUD. It eliminates the need for crafting a compass or clock, which clears two spots in your inventory. And shows you how much ammunition you have in stock.
It also displays your health and food/air meters in a more practical fashion as opposed to the meat/bubbles and hearts.
The HUD gives a more concise XP meter at the bottom and shows the armor you’re wearing. It will also display the damages for both your armor and tools/weapons. While the traditional HUD is a little more minimal, the Compact Display HUD takes up essentially the same amount of space while providing significantly more info to aid your Minecraft experience.