Squeeze Rule and when to apply it

[The Numerator]

Newish GM looking for advice regarding how often squeeze rules should be applied:

The squeeze rule states "In some cases, you may have to squeeze into or through an area that isn't as wide as the space you take up." How often should this be applied?

I understand the obvious small tunnels or hiding in closets, but in practice it seems impractical. Many (if not most) squares in the published AP maps are not a full 5'. Does this mean that anytime someone is in a square that is partially cut by a diagonal, or shortened by the depth of a wall, that they should be getting the -4 penalties due to squeezing? Or is that being too literal with the reading of "isn't as wide as the space you take up"?

I'd be curious to know how often other GMs are applying this...

[Maezer]

Typically I apply this wholesale. If you try to fit a large creature through a 5 foot hallway, then its squeezing. If you try to fit a human into a halfling house with 4' ceilings then he's squeezing.

When if something comes up that I have to break it down square by square, I generally go with if more than half the square is covered then you have to squeeze. If more than 3/4 of square is covered then its inaccessible. If this regularly becomes an issue, just move the walls so they fill any questionable space.

[The Numerator]

The recent encounter we had where I started thinking about this in more detail was in

Rise of the Runelords Location:

The Glassworks

where the map is tilted 45 degrees, so over half of the squares were cut by a diagonal wall (either slightly more than half or slightly less than half). In reading the squeeze rule, I was then thinking that whenever they weren't in a full square, then the -4 would apply. This made it very hard for anyone to hit (PCs or baddies) unless they were in Melee against someone in a shorted square (w/ the -4 AC).

It made sense as far as tactics, that if you can back someone into a corner they are easier to hit and you'd have an advantage, but it also made for a very long battle.

Prior to this, we had only ever applied the squeeze rules when in an obviously small space (a narrow tunnel, the aforementioned halfling house, etc), so now I'm wondering if I went too far in applying it to a normal building with a partially cut square...