"I believe that it would allow creatures to share the same space regardless of size. It wouldn't change the space of any of the creatures though, so a large creature would still take up 4 squares, but those squares could have allys in it."
"They wouldn't get the flanking bonus, because that comes from the swarming racial trait, not rat stack, so it would be of fairly limited utility."
Agreed that they don't get the flanking bonus. However, I think this actually has a specific use that I run into a lot: when multiple front liners get stuck behind each other in a 5 foot wide corridor (especially when a monster is blocking the path) or can't decide who will open a door first. Plus, now nobody is providing soft cover to opponents.
"Squeezing doesn't have anything at all do to with occupying the same space. You don't 'ignore the rule' it still applies if the area is too small for you, but other creatures being there doesn't have anything to do with that."
That makes sense! Thanks!