We had this argument recently at my workplace and dug into the pros and cons of both, ultimately settling or regular merges and no squash.
The only real argument for squash-merges is that history remains linear and visually "clean", but if you want to see a "clean" history of only the merge commits, you just can just use the `--merges` option on the command line.
Squash locally if you really want to or need to, but I'm a firm believer of disallowing it as the merge method for a changeset.