Interesting timing. I just used Windows' built in compression to free up 25 GB on a customer's full C: drive. First time I've used the feature in years. I noted that it didn't seem to be very good compression level.
Reads, in general, will be "boosted" when the filesystem is compressed.
You get an (almost) free boost by reading and extracting compressed data on the fly into memory/cpu. ie. read 4mb's off the disk but it expands to 8mb's (or more!) in memory, so read performance is elevated.
Writing of course, is slowed.
For some server loads, disk compression still makes a lot of sense - making the claim "We live in a post-file-system-compression world" a little dubious.
Even on the fastest CPU's, writing a file that must be compressed first, will always be slower than the same file on the same hardware, but not being compressed before written to disk.
It may not be magnitudes slower - depending on the data, hardware, and algorithm, of course - but it will incur some write penalty. So, with disk compression, you get a write penalty and a read boost.
I do not agree with your statement that compress + write is always slower, though. The analysis for cost/benefit of compression is the exact same logic for both reads and writes, but with different formulas based on how fast you can compress/decompress and read/write blocks. Let's imagine that your disk takes 10ms to write 64KB and 20ms to write 256KB. Then if compression of a 256KB block down to 64KB takes 5ms, writing is faster with compression done first. On the other hand, if compressing it takes 50ms, then writing it raw is quicker.
Most of Windows 10's boot, when Fast Startup is enabled, doesn't involve the typical system folders at all. Effectively when you shut down, they collapse the userspace, and store the kernel/services/etc into the hibernation file. When you "boot" the computer, the hibernation file is re-mapped into memory sequentially, and the user is prompted to login.
Compacting the OS definitely saves space. But I don't understand how it would reduce boot times from a technical perspective, since IO isn't even reading those folders during a default boot on Windows 10.
You'll get a performance boost by reading compressed data off the (slow) disk and expanding it in (fast) memory.
This can effectively increase read speeds greatly (reading a 2mb file off disk but it expands to 3mb's for example, that 3rd mb came almost "for free").
You are completely right for this case.
tldr: NTFS does a better job of avoiding fragmentation than FAT, but both need defragging.
If you're blasting highly compressible data to disk, compressing it on the fly can, in some circumstances, have a net bandwidth greater than just writing the data to disk (and greater than the disk alone is capable of). Yes, you incur more CPU load, but it's a net win. It's not universally true, YMMV etc.
(And yeah, natch, insert recitation of the Liturgy of the Optimizer as a charm against the appearance of a certain Knuth quote.)
The counter to my counter, of course, is that specialized silicon for compression can easily keep up with even these speeds. In fact, Sandforce SSD controllers build in compression to boost read and write speeds!