The Political Compass Quiz, aka the Nolan Test or The World's Smallest Political Quiz, was devised by a libertarian named Charles Nolan. This quiz asks a set of leading questions to tempt you to proclaim yourself a libertarian.
The most obvious criticism of this quiz is that it tries to graph the range of politics onto only 2 axes, as if they were the only two that mattered, rather than the two libertarians want the most change in. For example, if marxists were to create such a test, they would use a different set of axes.
The second obvious criticism is typical of polls taken to show false levels of support: the questions are worded to elicit the desired response. This is called framing bias. For example, on a marxist test, you might see a question such as "Do you believe people should help each other?" Most people would answer "agree" to this question; the problem is the "but"s that are filtered out by the question format.
Many libertarians use this as an "outreach" (aka evangelism) tool. By making it easy to get high scores on both axes, subjects can be told that they are already a libertarian and just didn't know it. This is the same sort of suckering that cold readers and other frauds use.