Wow, that was really fun. The description doesn't accurately describe the behavior of the game though, or rather maybe they could be more clear. For instance:

When any square lands, it shrinks all squares below it and in the same row segment. -> actually, it only shrinks contiguous squares in the same row (of course, now that I re-read it, maybe that's what you meant by "row segment")

That being said, I played that game for 5-10 minutes before remembering that it was an "Ask HN" and that I should come back here and provide feedback ;-) Bookmarked!