When I run xfce4.12 + fvwm + xcompmgr, both 'notify-send foo' and 'notify-send -t 1 foo' work. However if I don't run xcompmgr, 'notify-send foo' still works (except that of course there is no shade-out), but 'notify-send -t 1 foo' does not display any notification.
True, I can confirm that with Xfwm4 with and without compositing.
Ok, so after reading a bit more of the code things start to make sense. If you set an expire timeout of 1ms (millisecond!) (which is what you're doing in your example) then you get the fadeout with a compositor and a minimum display time of your notification (as it has to be shown and then gets faded out) - the default fadeout time has been set to 800ms. Consequently you don't see the notification, as it's only realized for 1ms. If you bump this value, you'll see the bubble shows even without a compositor (e.g. 10ms is enough for my old eyes). Bottom line: everything is handled as it should.