Does that happen on merge or before PR creation? I thought the setting only applied it when you hit the merge button, so you'd still have commits prior to the merge. Though that won't help if someone pre-squashes them :s
Happens on merge, sure, but the end result is that you kinda lose the individual commits. You can still find them in the PR, but you won't see them in the git history, so git blame will just point you to the one big squashed commit.
If you, however, open a chain of 8 PRs, and merge them in the right order, the individual commits will be persisted in the git history. Potentially worth it if you like to have a "story" of several commits...