Kitaev's compass model on the honeycomb lattice realizes a spin liquid whose emergent excitations are dispersive Majorana fermions and static Z 2 gauge fluxes. We discuss the proper selection of physical states for finite-size simulations in the Majorana representation, based on a recent paper by F. L. Pedrocchi, S. Chesi, and D. Loss [Phys. Rev. B 84, 165414 (2011)]. Certain physical observables acquire large finite-size effects, in particular if the ground state is not fermion-free, which we prove to generally apply to the system in the gapless phase and with periodic boundary conditions. To illustrate our findings, we compute the static and dynamic spin susceptibilities for finite-size systems. Specifically, we consider random-bond disorder (which preserves the solubility of the model), calculate the distribution of local flux gaps, and extract the NMR line shape. We also predict a transition to a random-flux state with increasing disorder.

Kitaev's honeycomb-lattice compass model describes a spin liquid with emergent fractionalized excitations. Here, we study the physics of isolated magnetic impurities coupled to the Kitaev spin-liquid host. We reformulate this Kondo-type problem in terms of a many-state quantum impurity coupled to a multichannel bath of Majorana fermions and present the numerically exact solution using Wilson's numerical renormalization group technique. Quantum phase transitions occur as a function of Kondo coupling and locally applied field. At zero field, the impurity moment is partially screened only when it binds an emergent gauge flux, while otherwise it becomes free at low temperatures. We show how Majorana degrees of freedom determine the fixed-point properties, make contact with Kondo screening in pseudogap Fermi systems, and discuss effects away from the dilute limit.