Gitflow: Should I squash commits when merging from a release branch into master?

In my opinion, and bear in mind, this is just an opinion, and you will likely get different answers, you should NOT squash the commits when merging into master from the develop branch. Doing so would lose a lot of the history of the changes that have been made. For example, almost all the commits I make are tagged with an issue number, so that there is full trace-ability back through the git history into the issues that were raised, and why changes were made.

More to the point, you shouldn't be merging directly from develop into master. Assuming you are following git-flow, then this transition should be being done through a release branch.

If you had asked whether, when on a feature or hotfix branch, should the commits be squashed then that would have been a different answer. In these cases, arguably the branch should be small enough to warrant only a single commit, so in these situations, I almost always rebase and squash commits into a single one, prior to merging into the target branch.

The master branch is used to maintain a record of releases, so each commit should represent a squashed set of changes from the development branches that made up the release build.

Squashing the commits makes it much easier to see what changes went into a release and to create hotfix branches from a release commit when necessary. Tag each squashed commit with the release version number.

If you squash merge between develop, a release branch and master it gets very hard to merge a change to a release branch back to develop without file conflicts. It's also hard to merge a hotfix to develop, then merge develop through a release back to master later.