What on earth does "test squasher" mean? The documentation message ("Label for the button in the debug toolbar to test the transaction squasher.") tells me nada.
See T188026 for context. Alternative words for "squasher" could be "compactor" or "combiner".
In short, the squasher is an algorithm that can merge several "transactions" (things that represent changes to the document, like inserting a character at a given position) into one, for the purpose of reducing memory usage when we don't need the granularity. We maintain the history of transactions for undo/redo (and in the future, for synchronizing the editors when editing collaboratively) and in some cases one undo step is represented by several transactions.
For example, typing "test" is internally represented as four transactions (insert "t", insert "e", insert "s", insert "t"), and this system can convert it into one transaction (insert "test"). For a more complicated example, inserting a picture with caption is internally represented as two transactions (one for the picture structure, one for the caption text), and this system can convert it into one.
I am not sure if this helps you translate. :)