Squash option for Existing MR when Allow and Encourage is selected

For the squash commits options, it states this:

Set the default behavior and availability of this option in merge requests. Changes made are also applied to existing merge requests.

However, this is NOT the current behaviour. Allow and Encourage does not modify existing merge requests. Whatever is the existing MR setting, it will take that instead.

For example:

Project Setting	MR setting	Squash Option
Allow (unchecked)	Checked	Checked
Encourage (checked)	Unchecked	Unchecked

☝️ The squash option would adopt whatever is set in the MR setting NOT the project setting.

Question

Is this the behaviour we want? If yes, then we should look into changing this text. If not, then we need to adjust our logic.

Background Information

• @tkuah started a discussion:

  issue, can handle later, as behind feature flag

  Changes made are also applied to existing merge requests.

  This is not accurate. Allow and Encourage does not modify existing merge requests.

Related Issue to also consider

Should there be a single MR state when turning off "Required" squash option > #225277 (closed)