CX3 does not do any image compression.
In Manual DMA Channel Call back, you will get the buffer to do some modifications (we actually add UVC headers in the callback - refer AN75779 example code OR Ov5640 example firmware provided in the SDK).
But implementing the data compression in DMA Call back will affect the device performance. You may end up seeing the Buffer Overflows and data loss. Therefore, it is not recommended to do the same.
So it's technically possible to compress the data, but the processor probably won't have enough processing power to to compress each frame in time?