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The compression setting is used only when writing modified chunks, it will not alter chunks that are not loaded at all.
We had a tool that would, among other things, recompress all chunks. I'm not sure if it still works, I'll have a look when I get back to a computer.
Posts: 6,485
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Can you compile a program, or do you need an executable? When you initialize the Cuberite's repository with cmake, you can specify "-DBUILD_TOOLS=1" parameter to build additional tools, one of them being MCADefrag. That program, when run, reads all .mca files in current folder and recompresses them. Be sure to operate on a copy of your world first, verify that the recompressed data is still valid, and only then replace your original world files.