I had videoed myself back in spring when I did a multi-step compile of my Elite game...it's live now on my channel. I tried to do it the way I would have back in the mid 80's when I only had a cassette recorder, a ZX81 printer, and a 16K RAM pack. The only difference is that instead of saving to a cassette, I captured the intermediate files on my PC, which is a bit more robust (i.e. no bad tape loads) and then later I go back to the PC and demonstrate what was actually going on.
https://www.youtube.com/watch?v=rRtalbnJP5w
So it was very possible back then to use MCODER II to create compiled code bigger than a few K and it actually was pretty straightforward. I was even more impressed with how it handled itself in multi-step compiles. A really well thought out program. Maybe one of the best on that platform IMHO.
I also briefly outline how to do it if you have 48K of memory (just highlighting what Fruitkake had shared with me). That mechanism is a whole lot simpler, obviously, but my goal was to see how it would have gone had I owned MCODER II myself as a kid and wanted to compile some of my own BASIC code. It definitely is very capable to do it in multiple steps.
One of the things I tried was compiling like half a dozen small modules in sequence (not in this video), and integrating them into one program (that was one attempt at a compiled Elite) and that also worked really well. So I could really see someone creating small routines in BASIC, compiling them, and then using them in other parts of the main program. All you had to do is organize yourself a bit at the start so you planned which module you'd compile first. I think that's what I really liked about the 1980's, you had to think about what you were doing when programming, even in BASIC. Today you can just try and see if it works and throw it out with little invested time. Obviously with emulators you can just max out the RAM and do it in a single compile, but not many folks likely had more than 16K of RAM back in the day.