The clunk you hear at start up, is the starter overcoming the spring's tension capabilities in the compensator as it ramps up and bottoms out on the splined shaft. The starter gear goes from a damped system to a hard hit as it bottoms. The hard hit is what causes severe stress on the starter gear. The SE Comp uses a different system of springs (concave washers) that allows for more progressive damping before bottoming, and far more force is required to bottom the SE Comp springs. A force the starter won't or shouldn't totally overcome.
Yes it is on the crank, but it acts as a system, with the primary chain connecting it to the clutch basket/flywheel. So when the clutch basket/flywheel turns, so does the compensator.