tbh i like the overcompressed sound a lot in this case because it fits well the saturated aesthetic
i didnt meant bitrate compression i was talking about compression the sound effect, for instance if you used fl studio i think if you let all the instruments really loud the limiter compresses the sound so it doesnt clip the waveform, most audio programs probably have something like this too
using a lossy format is probably fine, i dont think u can really notice it until the bitrate is reeeally low