Yes, it can be annoying if your developers are committing nonsense, but then just tell them to not do that, or to rebase locally before pushing.
If you find yourself troubleshooting a bunch of nonsense commits, you can just do a diff to the merge commit, and it will show you all the changes. But you also have the option of figuring out exactly which commit caused the problem, and seeing it in context. If I see an error in the middle of a bunch of commits that look like "trying x with y." Then I know that this is a tricky problem, and the developer was lucky to get it to work at all. If it is in the middle of a standard looking commit, then the developer didn't struggle with this. So maybe they didn't put enough effort into it, or maybe it is a rare corner case.
When I'm troubleshooting other peoples problems, every bit of information helps. Especially when the developer who introduced the problems is no longer with the company. Squashing commits removes some of that information, without providing anything that I can't approximate by using merge commits in logging/diffs.