The version shown here is assembled from two separate buttons that were part of the RAF uniform. More specifically, these were trouser fly buttons.

The bottom button has a tiny needle in the middle that projects upwards. When balanced on the needle, the top button rotates in the earth's magnetic field until the two radioluminescent dots (the upper right corner in the photo above right) indicate north. The single dot points south.

If you were using the compass, your fly would be open, but getting captured or shot would be the greater concern.