Why are most compasses liquid-filled? I assume it's because the liquid acts as a damper so the needle doesn't swing as much; is that it?

Almost all compasses I've seen have the problem of bubbles developing, especially in cold weather. I assume the liquid contracts in the cold, causing any residual air that was trapped inside during the manufacturing process to expand. If so, is it really that difficult to design a compass with an expansion valve in the base? Or is there some other reason why bubbles develop when it's cold, and then disappear after I store the compass in an inside pocket for 15 minutes?