If you have transparency in a Hotbar texture (most do), there's a strange bug when a waypoint makes its way onto the compass, where the transparency of the texture fails and returns to the original colour with 0% alpha channel. What's even stranger about this, is it only happens when you're on the same level as the waypoint. When the little up or down arrows are there, the problem doesn't occur. This happens when Optifine, this mod, and Xaero's are all installed.

Do you know a mod that causes it? because I can't reproduce this issue with only the vanilla UI...

It happens with my own resource pack and also packs from other authors that alter the icons.png file. I'll have to test it out again with the vanilla hotbar because I don't remember if I originally tested it or not.

Ok, so it happens with the vanilla hotbar texture as well. Here's a gif. Pay close attention to the timing of the "T" waypoint on the hotbar, and the hotbar background.

Also, here's an example of how the problem no longer occurs once the little arrow indicators on the HUD Compass appear. In this example, I've gone 3 blocks up from the level of the waypoint, which is where the "down" indicator first appears.

No worries, just let me know if you want me to test anything on my end.

Oh! You are using Xaero's integration. I didn't test that. It's probably an easy fix.