The Compact Route option is in the Tools menu, at the very bottom where it is less likely to be noticed (for good reason).
Like Phil, I have never tried it either.
It is a bit like the big red button labeled "DO NOT PRESS" on the nuclear missile launch panel at NORAD - to be used only in an emergency. It appeared many years and many Trainz versions ago and was meant to be a "nuke-it" option, a last ditch attempt, to fix certain problems that developed in very large routes.
Auran's advice back when it first appeared was always to leave it alone unless you enjoy pain - which Alberto is now experiencing. Its more sensible and far less painful alternative is to make regular backups.
Alberto, alcohol can help ease the pain.