How squad works?
AFAIK Squad is an additional grouping method exclusive to WvW. The UI works for the party members only (generally party consist of 5 people at max).
Those who became Commanders, by the purchase of the 100 gold Commander’s Compendium are the Squad leaders. Regular players can join the squad of a commander, and by doing so they get to see the commands of the chosen commander as well as their squad chat. Squad members also get icons over their character, but besides that there is no visual feedback about them.
One of the reason for the lack of squads might be the 100 gold price you have to pay to become a commander.
Once you unlock the ability to become a Commander, you can use it in both PvE and WvW. The “Create” and “Disband” buttons become available to use, which you can use to activate/disable Commander mode. Creating a Squad enables other players on the entire current zone/map to see you as a blue icon. Once they can see you, they can right click your portrait and use the “Join Squad” option to join your Squad.
After people have joined the squad, they are able to use the exclusive Squad chat through /d or /squad. This text color shows up as a slightly dark yellow.
Using the Disbanding option disables the blue marker from appearing on the map and above your head.
Hope that answers your questions!
Shaeltali Liashavi