Outlook's own Compact Now only reclaims empty space, so once a data file is genuinely full of mail it barely moves the needle. Splitting is the physical fix: the tool carves that one heavy file into several smaller PSTs, each small enough to open quickly and back up on its own.
You keep every message, just spread across parts you name yourself. Point Outlook at the parts you still use day to day and shelve the rest, and the giant file that was slowing everything down is gone for good.