In Manual Mode, yes, it will only work in Auto ISO because that's the only place you're asking the camera to adjust anything for you (by definition "Manual" means "Don't let the camera tell me what to do, I've got this."). If you wanted to over/underexpose something then you would adjust shutter speed or aperture or ISO yourself ("manually"), deciding which to change based on what you're shooting and what your priorities are in the exposure (motion, depth of field, noise, etc.).
In Av and Tv modes the exposure compensation works in both fixed and auto ISO, because by default the camera is already choosing at least one setting for you (shutter speed in AV, aperture in Tv) and you're telling the camera how you want it to adjust the metering when making that selection.