this has significantly improved with recent updates. tested 3.0.32 on ios and android, and when using the compass experimental mode, you see the arrow move more like a mechanical compass (ie: it does jiggle a little but is subtle).
the compass indicator is visible when you stop moving, then when you start walking it goes (this is good).
tested on Sony Xperia Android 7.1.1, Asus ZenFone AR Android 7.0, Samsung S6 Android 6.0.1, iPhone X iOS 11.2.6, Google Pixel 2 Android 8.1
Particularly when stopping or starting, the direction arrow does bounce around. Moving at a steady pace seems to help the arrow rotate smoothly.
More effort is required to improve the arrow behavior, including