If the code base is idempotent, I don't think showing commit history is helpful. It also makes rebases more complex than needed down the line. Thus I'd rather squash on merge.

I've never considered how an engineer approaches a problem. As long as I can understand the fundamental change and it passes preflights/CI I don't care if it was scryed from a crystal ball.

This does mean it is on the onus of the engineer to explain their change in natural language. In their own words of course.