I have a compound path which I am trying to edit so that I have a closed path. However, when I drag the anchor point over a part of the compound path, the overlapping portion gets negated and becomes white. How do I fix this?
You need to change the fill rule of the compound path. An even-odd fill rule will give you the effect you're seeing whereas a non-zero winding fill rule uses path direction to determine the fill. You can change both fill rule and path direction from the Attributes panel.
It's not clear from your screenshot if you have a single path or multiple paths making up the compound path; if it's a single path then simply set the fill rule to non-zero winding (the left of the far right buttons). If there are multiple paths then you may also need to set all path directions to the same (hit either of the middle buttons).
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