Question in title.
To avoid "same direction" answers, let's assume the B and H are pointing in different direction, i.e., the magnetic permeability is not a diagonal matrix. What direction will a compass (theoretically) embedded inside a magnetic medium points to?
I feel B-field is the answer because the Lorentz force law f=q(E+v*B) involves only E-field and B-field, regardless of whether the medium is magnetic or dielectric. And since the operation of the compass must involve Lorentz force in some way, it can therefore only depends on B-field and E-field?