Thanks to tidus8 for the inspiration!
That FF8s time compression not only compressed Squalls world, but every world. During the compressed time Squall stumbled upon Traverse Town world and ends up helping the heroes eventually defeat the bad guys and fix all worlds. Sending him back to the flower field to meet Rinoa.
If time stops, tidus8 is correct: Ultimecia compressed every world that could be. A possible world is the way the universe would be . One way to think of it is as a multiverse, where “a hypothetical set of various possible universes including the universe which humans live in”; or one could think about it as a many-worlds interpretation where “all possible alternate histories and futures are real, each representing an actual “world” (or “universe”).
Without time, no other worlds could exist. As time is the change between states, or “the indefinite continued progress of existence and events that occur in apparently irreversible succession from the past through the present to the future”, nothing else can come forward. All potential to grow stops, thus creating a Void (which was what Ultimecia wanted).
But what I think tidus8 means is every Final Fantasy world. Traverse Town actually isn’t from Final Fantasy, but rather Kingdom Hearts. However, one town in the Final Fantasy universe actually fits this description:
Phantom Village, also known as Mirage village, is a town in the merged world in Final Fantasy V. It is referred to as The Town that Time Forgot for being caught in an Interdimensional Rift for over 1,000 years.
Exdeath is responsible for freezing time in this town, or so he says. But what if Ultimecia’s Time Compression actually is the ultimate time magic casting the Interdimensional Rift? It probably isn’t. One wouldn’t know time stopped in Time Compression, unlike the Interdimensional Rift.
If Ultimecia did compress every Final Fantasy world through Time Compression, she would have had to travel through time. But she could only travel to the past. Since this world would have had no future, all Final Fantasy worlds take place after Final Fantasy VIII. And of course, every Final Fantasy world would have to happen on the same planet.
Could this have meant that Ultimecia’s main goal, to be a living god, was to rival Cosmos? What do you think?