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A compass made with this mod works the same way as a vanilla compass. Only the crafting cost has changed.

1. Hold the compass in your main hand or offhand.

2. Watch the needle. In the Overworld it points toward the world spawn point.

3. Walk in the direction of the needle to head back toward spawn.

In the Nether and the End, a normal compass spins aimlessly because those dimensions have no usable spawn point for it.
Don't expect it to point to your bed or your base. It points to the world spawn only.

Because compasses are cheap now, you can:

Keep a spare in your inventory so you never lose your sense of direction after dying.
Put one in storage near your starting area.
Craft extra compasses for other items that use one as an ingredient, such as the recovery compass in versions of the game that have it.

To point toward a different location, use vanilla methods such as a lodestone, which links a compass to a chosen spot.