Well it's not displaying the compass as such (i.e. your direction of travel).
It shows the direction you need to travel (which may be different) to get to the next waypoint/turn.
As an aside I find pointers like that pretty useless where I live. There are so many switchbacks on trails that trying to follow that arrow would be pointless (pun intended).
Semantics here but I would say that a compass 'arrow' only points to your direction of travel if you set it up to do so. Most times you set your compass to show you the way you want to go, but then you need to orient it so the arrow points in your 'direction of travel'. But I agree a pointer can be of little use in certain situations. Then again if you're a geocacher and it's pointing towards the cache that might be useful :)
There was a time, when I lived near a river/ocean, where using a compass was the way to navigate. On water you can (mostly) go directly towards your destination even if you can't see it.
Now as you say a compass can be useful--even in mountainous areas--assuming you're close enough :)
Around here it is highly advisable to follow established (and maintained) trails. Going off trail can lead to bad consequences. Too many places where "falling" isn't going to end well.
