Yes, it will compact. Eventually it will wash down or away, but maybe not for years in your climate. Depends on the type of sand. Sharp sand will rapidly form a rigid crust that repells water. Play sand doesn't form a crust so much.

If you have clay soil & place sand on top it may help the soil. I have placed sand on top of clay soil for a cactus garden - it worked into & amended the soil. I had dudleya in the sand topdressed soil & they loved it. When I place sandy soil alone in a pot it compacts. A problem with too much sand is stray cats can use it as a toilet.