There will be C64 software that runs on the Mega65 and there will be software that won't run. In general software that stays to the documented side, including more advanced stuff like implementing a split screen via a rasterinterrupt should work. Hacks like FLi, DMA delay and so on probably won't work and neither will code using illegal opcodes or that depends on cycle exact timing work.
As I do have a real C64, and I expect most Mega65 owners will have a real C64, that 100% compatibility is not achieved is not the end of the world. In fact I even think it is good thing at this puts some pressure on Mega65 owners to make software Mega65 compatible. While fixing the software, one might add a few small things that take advantage of the more advanced hardware.
So yes, incompatibility sucks, but minor incompatibilities are probably also just what is needed to kickstart software development for the Mega65.