The 'squish' Phil is talking about is not the air being squished up into the domed portion of the cylinder head by the piston, that's just regular compression. Instead, it involves the air being 'pinched' between the top of the piston and the flat shelves on the sides of the combustion chamber (somewhat on the spark plug side, mostly on the opposite side). These shelves are part of the shaved surface of the cylinder head, so shaving the head doesn't affect their position relative to the block (and thus the clearance to the piston when bolted on).

The way Phil is building his motor, the piston comes *very* close to making contact at higher rpms. So when running, the air is just compressed normally as the piston moves upwards, but right at TDC the pistons comes very close to touching, and the air trapped between the shelves and the piston shoots out sideways and would tend to create a swirl in the center domed portion of the chamber. The swirl helps mix the fuel better and also promotes a quicker combustion. The less pinch or squish between the piston and the cylinder head shelves, the less swirl.

Shaving the head just brings the top of the domes combustion chamber closer and reduces its volume, and would have no affect on squish. Decking the block, however, makes the pistons poke up farther and thus closer to the shelves.
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