Reel Repair by Alan Tani

Ok.

Yeah, clearly in the squidder when you tighten it down it the spool shaft will press the inner race outwards on both bearings.

I'm not an engineer, and I don't know the hardness of the steel in the bearings, but to actually damage the bearings would likely take more force than your going to use as a cast control mechanism.  (I very likely am wrong).

What IS clear is that you will wear them much more rapidly and they will lose good function much much more quickly. 

Long story short, not the way to do cast control.  But I doubt very much you will do more damage than just wear the bearings faster. (again, I could be/am wrong)

The squidder's enormous ball bearings are sort of anomalous in fishing reels of that size.  (see Gfish photos above)  I think Penn had only used ball bearings in the largest Senators before they put them in a Squidder.  It was a cautious and conservative approach.  Honestly  I don't think you can hurt those bearings. 

The spindle ends are riding on a copper shim so it'd difficult to wear them out as well. 

Aside from the those vein/fin things in the plastic Squidder spools, the tail plate spool tension knob is all you have to slow it down and make the reel manageable for the intended task, surf fishing.

I'll  say again, the danger of using the spool tension knob is it's ability to crack bakelite side plates.  That may be why Penn put inside and outside rings on such a small reel.

 Yep, The squidder had ball bearings from its introduction in 1939. At that time, the only other Penn reels with ball bearings were the 14/0 & 16/0 senators