When a new file is created in a folder with the compressed (C) attribute then it'll also inherit that attribute and will be compressed
A directory's compression attribute provides a default compression attribute for newly created files and subdirectories. When you call CreateFile or CreateDirectory to create a new file or directory, the new file or directory inherits the compression attribute of its parent directory.
Compression Attribute
It'll be compressed on-the-fly without any uncompressed data being saved first
However if you move a non-compressed file from the same partition then it won't be compressed, only its parent is changed from the old folder to the new folder. And if you copy a compressed file from another partition then it'll be decompressed then copied and recompressed upon saving at the destination