Colin's video doesn't say anything different from what I have frequently said. The compass has nothing to do with the GPS. At 5:58, Colin says:
"Our compass error is so big at this point that if we try to fly this in GPS Mode, it would not fly right because it thinks it's pointed one way and it knows it needs to go somewhere to fix it and it's trying to go there but it's going the wrong direction, it's going to be very confused. It would fly just fine in Attitude Mode, but it would not fly right in GPS Mode."
He doesn't say it will fly away or crash, he says it won't fly right and it's going to be confused. Which is all I've ever said.
The compass is only used to determine the heading, or which way is the Phantom pointed. This heading is only used when flying between two waypoints. Your home point is one waypoint and where the Phantom is currently located is another waypoint. So if you enter FS or RTH the Phantom will calculate the heading needed to return to home. It turns to that heading and starts flying home. The Phantom MC will frequently recalculate the heading to go home to compensate for wind. If the distance to home increases it will adjust the heading even more to compensate. It will get home, battery permitting, but it will be a wide arc instead of a straight line.