So, the basic function of a compressor is to reduced the dynamic range of the signal. That is, to reduce the difference between quiet sounds and loud sounds. It may do this by boosting the level of quiet sounds, reducing the level of loud sounds, or both.
But you are right that, in principle, if you’ve already reduced the dynamic range with one compressor a second “stacked” compressor can only act within that new dynamic range and can only really reduce the dynamic range further.
The argument then becomes: why not just use one compressor and change the setting?
The problem is, this assumes all compressors do the same thing and impact the signal the same way, and across the whole frequency range. And in practice, they don’t.
Compressors, especially analog compressors, are electronic circuits and electronic circuits almost always have compromises. In the case of compressors, this means that a given compressor circuit can compress unevenly across the frequency spectrum.
This means that the compressor settings (threshold, ratio, make-up gain) may act differently at different frequencies. You may, for example, get a different ratio at 1kHz than you do at 10kHz. It may be the case that the compressor responds quickly to signals at 2kHz but no so quickly to signals at 12kHz, and so on.
Different circuits will have different characteristics. So, by combining them, you can shape the tone more carefully.
Note that the audible impact of compressors can be quite subtle and so this really can be seen as tweaking things at the edges.
And, as has been pointed out, the main use of having multiple compressors seems to be to use them one at a time with different settings for different songs, or different parts of a song. If you have a multifx system, then you would do this with a patch or a “scene”, etc. which swapped out the compressor, or even just changed the compressor settings.
Personally, I think this level of tone-tweaking is a bit beyond most of the people on this forum and if you are still at the stage of trying to understand what a compressor does for you, then it’s certainly not worth bothering with.
But it’s an interesting discussion to have.
Cheers,
Keith