Fonts aren't just images. Characters have certain visual features we rely on to differentiate them from each other. When characters are scaled in size, the scaling is usually not done in a uniform manner - instead, the less significant features are scaled differently than the more visually significant features so as to minimize the loss of legibility.
In this context, "mechanical compression" means that the fonts were stretched and/or squashed as if they were mere images - without concern to whether the typographic features would be preserved.
Based on this part of the article:
The decision to use mechanical compression instead of commissioning a compressed-width variant...
it appears that "mechanical compression" refers to rendering the text in the standard font, and then reducing the horizontal width of the rendered text after-the-fact.
I think it simply means the strokes are pretty densely packed. Kanji is very complex structure wise, bold typefaces such as this needs to utilize space carefully otherwise some strokes will become indistinguishable
