This alternative bonemeal doesnt really seem usefull compared to the block itself. Also technically nothing blocks me from placing crops in a + with a compost block in the middle and a ground block above it right?initially, no. However, once you have an autocrafter, an Expanded Redstone pump, and some form of item piping, fresh water should be trivial.
A compost block from Vegan Option needs to be touching a farm block. Then, it increases the crop growth rate for that farm block. I usually place the compost in a layer immediately under the farm blocks.
Another option is to combine the compost with saltpeter to make fertilizer (an alternative to bone meal).