The first problem is that if you are on Spectator mode and you just fly around and find a lake or something, There will not be squids in it. But if you will switch to any other gamemode, the squids will spawn.
The second, is that if you are spectating a squid, he will stop moving after a short time. But when you leave him and switch to other gamemode he will continue moving.
Mobs (spawning and behavior) should ignore spectators, otherwise the could affect the normal users in the game. Works as intended as far as I can see.