The engine I'm using, which is blender, there is an option in the save menu to compress the file size. The main problem I'm having is that I can't get it (so far) below 1.5 MiB, except if I try to severely lower the quality of texts and other map details. But when I use the Blender compress option, it changes the file size to (Currently): 1.59 MiB --> 340 KiB. I want to know if by compression, you mean submitting it as a zip/rar file isn't allowed?

If the game assets are compressed, it's fine.
Submitting as a zip/rar/7z or any other compressed format is allowed, but the files that you put in must be below 1.44MB. If I have a 3MB game and compress it to 1.44MB,

Like I've said in other questions, it only matters what the overall size is after you extract the files, and game assets being  compressed is fine.