Glow squids spawn in villager farms, while normal squids not.
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They also spawn if you place water, cuz I built the Fox Lodge in-game and glow squid started to spawn in the small pond, while they didn't spawn in the toilet, since the water is at a higher level.
They're spawning in waterlogged stair blocks with no other water on all six sides. Even in Minecraft logic, this makes no sense. The targeted fluid shows as both minecraft:water and #minecraft:water, so there's got to be more to it than that.
There needs to be some mechanism that prevents them from spawning in water below y =31.
Unfortunately the fix provided doesn't solve the flowing water issue. It can still break farms such as in MC-248639
This is caused by the changes introduced in 21w40a, as glow squids can spawn in every water block under y = 30. I am not sure that this side effect was intended though.