Album vs Compilation - what's the logic?

Plex is using metadata from Musicbrainz to categorize the different release types. There’s an existing suggestion to allow for a local override where users can directly modify the MusicBrainz categorization inside Plex.

There’s also a guide on how to trigger a correction directly at the source:

Plex already considers the RELEASETYPE tag in the files‘ embedded metadata to override the categorization.