Past exam of the short options course of the University of Oxford / 2021 / 5 / a / i / 3 / Solution

Exactly $|a|>1$ works. Composition with the hyperbolic tangent is smooth for every $a$. If $|a|>1$, set $R=\mathrm{arctanh}(1/|a|)$. For $|x|\ge R$, $|a\tanh x|\ge 1$, so the result vanishes; it is therefore a test function with support of a function $[-R,R]$.

If $|a|\le 1$, every finite $x$ satisfies $|a\tanh x|<1$. The given positivity makes $\varphi (|a|\tanh x)>0$ for every $x$, so its support is all of $\mathbb{R}$. In particular $|a|=1$ is excluded even though the function tends to zero at infinity: decay is not compact support.