I have a suggestion that might work for everyone although im generally on the side of those that dont want to see this in the game.
Whatever the compass ends up being, a more detailed one leading players to every little thing or just a general one showing only known and bigger locations - make it optional.
And make an actual compass an item that you must buy/obtain/steal in the game itself rather than just an option in the options of the game.
You may even give a starting basic compass to all players seeing how we will probably play a ranger so it makes sense. Or let one of the starting crew - allies have it, then get them killed in the intro and the player can take it from their inventory if that fits.
Make the more precise "im hand-holding you to any item" type of compass available later on, for example.
Although i would prefer those not to be there at all and you get your designers and writers concentrated to provide decent clues and directions players can use themselves - with the help of a nicely designed journal to boot.
It would make sense since even in most of the possible apocalyptic events the Earth magnetic fields would not be changed so you can reasonably expect an ordinary compass to work. Although normal compasses dont show locations like cities or different places or items but we are talking about game compass so you have a free license there.
And of course, it would end up seeming much nicer then just having a freaking magic icon glowing on the screen.
One of the first mods for Skyrim i downloaded, that really, really enhanced my gameplay, was the one that just removes pointing out of small non-quest related locations on that compass bar at the top of the screen.
I still got the main quests directions, if i choose them, but i no longer see small immediate locations around myself on that freaking bar.
Which means every single small location i find is immediately a reward in on itself.
And the fact that i now miss most of them if im not specifically looking is my own damn fault - which makes the whole deal of exploration actually meaningful and very rewarding. And MY CHOICE.
Of course, Skyrim is so badly and intentionally designed in that regard that you actually need a quest compass otherwise there is literally nothing else by which you would find any bigger location at all.