Both composting and septic systems are intended to convert the deadly ecoli bacteria to safe compost. Both systems have very specific requirements.
Both must raise the temperature of the compost to 65 deg C for 15 days and composting systems require turning the mixture every day. The individual toilets require individual users to be focused and specific with their waste management. A septic system shifts the responsibility to the community and require less focus and effort by individuals.
All too often, tiny house owners choose composting because they imagine that this will free them from the cost of a septic system, but then they are casual about processing their compost and end up polluting the environment. Personally managing your own waste all the way to safe compost is a chore. Then, when all is said and done, you must have a place for all that compost. A community can produce more compost than can be safely applied to a garden. What then?