A bone fracture in which the broken bone causes a surface wound. The bone itself may not pierce the skin, but usually does.
Because of the open wounds often caused by this injury, it is much more susceptible to infection than a normal bone fracture.
In a normal limb, the bones and muscles provide force against each other for stability; if the bone is broken the muscles may contract and increase the damage caused by forcing the bone fragments or ends through tissue.
Having sustained this kind of injury, I can attest to the severity of a compound fracture. I was an avid mountain biker before the accident; during the accident my strong leg muscles contracted, shredding the left side of my left leg. It was not a nice experience.