Does that sound about right? Maybe our rules guys @
shidaku and @
Paraxis could weigh in...
The variant use of the rule is certainly making things more confusing.
The intention of squeezing is to be able to enter and exit a
fixed space, such as a narrow crevasse or to slip through some otherwise unmoving area. The problem with applying this rule to foes (and friends) is that each controls the ENTIRE SPACE, they don't
occupy it, they
control it. This means that Bob the Fighter is not frozen like a wax statue during your turn, but he his dodging and weaving and moving around that 5 ft area the whole time. Attempting to squeeze is of course, possible there is open space, however the open space is fluid, and as such as you must navigate fluid space (And we all remember Species 8472 lives in Fluidic Space so that's bad enough!) with moving obstacles. Obviously the squeezing rule can be applied here, but I'd be more favorable towards an acrobatics check.
The reason no check is required for friendly spaces is that Bob the Fighter is keeping an eye out on everyone around him, you included, so when you enter his space he attempts to dance around you while you quickly move through it.
Now, what has been consistent in all of this is
movement whether you are attempting to squeeze or running straight through, you are still moving. The key words fall into "breaking up your move" when you attack you are explicitly ENDING your movement in order to do something else (attack).
Now certainly if you are allowing a person to make some sort of check to occupy another's space, that's certainly an option, it's not by the RAW but it's an option. By the RAW, since you cannot squeeze through another's space and you cannot end your movement in another's space, you cannot STOP moving in their space to attack.
If you want to end your movement in the space of another, by RAW, you're going to have to potentially use a spell or play a halfling. Or of course, come up with a variant rule that allows your to do so.
Personally, a feat like say "Back to Back Fighting" that would allow two players with the feat to occupy the same square while fighting, would be hella cool.