Have you checked borgbackup docs, FAQ, and open Github issues?

Yes

Is this a BUG / ISSUE report or a QUESTION?

BUG

System information. For client/server mode post info for both machines.

Intel with 16GB of RAM

Your borg version (borg -V).

1.2.0b2

Operating system (distribution) and version.

Ubuntu 20.10

Hardware / network configuration, and filesystems used.

local repo on btrfs

How much data is handled by borg?

1.1TB

Full borg commandline that lead to the problem (leave away excludes and passwords)

$ borg-1.2b2 -v compact /myrepo
compaction freed about 244.55 MB repository space.

$ borg-1.2b2 -v compact /myrepo
compaction freed about 106.94 MB repository space.

$ borg-1.2b2 -v compact /myrepo
compaction freed about 106.93 MB repository space.

Describe the problem you're observing.

borg compact needs several iterations to reach a final state and does not seem to compact as much as it should. More precisely a lot of 17 bytes files remain after compacttion:

# find /myrepo | wc
 200649  200649 2351093

# find /myrepo -size 17c | wc
  20344   20344  244128

Can you reproduce the problem? If so, describe how. If not, describe troubleshooting steps you took before opening the issue.

I observed the same behavior on several machines/systems/repos.