Is "squib" an actual term in real-life history? I have not been able to find it through Google but results are muddled with Harry Potter references.
Your google-fu is weak.
Squib is, according to this source, from the 1520s.
That's not even close to the same meaning.
In the Skulls & Shackles Adventure Path, "squib" is a term meaning to disguise a ship by changing the rigging.
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In reference to shipbuilding practices, squib is a Golarian only term, to the best of my knowledge. Squib in Earth terminology always refers to small explosives or written sarcasm.
There is a long history of disguising or repurposing ocean vessels, yet squib has never been a term for it. The closest to an official term is a Qship, a standard class merchant vessel rearmed for the sole purpose of luring and sinking submarines. Otherwise, it has been known that merchant vessels would disguise themselves to look like less important targets, ocean liners and merchant vessels were sometimes armed and repurposed for war from the earliest shipmaking histories to current times (including armed ocean liners during world war 1). Any modified vessel might simply be classified "a" or "as" (a for altered, as for altered structure).