Why can compact frame in road bikes be made in less sizes than the traditional frame? When I read about Giant, they talked about how in the past road bikes have to be in like 10 incremental sizes, but Giant had an idea from a mountain bike (which usually only have S M L sizes) to make road bikes with compact geometry so that it can be made with bigger jump in sizes.

How does this work? why a traditional frame can not be made in the same jump in sizes?

No matter how I compare the frames, I can't wrap my head around how a compact geometry can cover wider possibility of sizes that the traditional frame does not. The head tube angle is the same, the seat tube angle is the same, so raising or lowering stem and or seat post will be no different regardless if it is a traditional or compact. It is not like compact geometry can have adjustable stack and reach.
The claim is pure marketing and does not make any sense at all, unless you only care about standover height. It is true that Giant has smaller selection of sizes than competing manufacturers, and Giant might use the claim to explain why, but even their own models are not consistent with the explanation:


High end Giant models have 6, not 3 frame sizes. This is not that many less than competitors who have 9 or 10.
Giant has a series of non-compact "aero" road frames. These also come in 6, not 9 or 10 sizes.


On the other hand, smaller selection of sizes reduces tooling and inventory costs. If a sponsored athlete requires a bike outside standard selection, it is easier to provide them with custom frame than mass produce the wider selection of sizes.