Occasionally, squids will start floating above water, even though they should remain inside of it. While flying squid are a real thing, this does not seem to be intended behavior within Minecraft (given that it is highly inconsistent).
Squids are swimming happily in the sea
Some squids are flying, out of the ocean, up into the air.
This issue cannot be consistently reproduced, and seems to be highly lag-dependent. The attached setup can sometimes generate squids with this behavior, but it is rare.
Based on 1.11 decompiled using MCP 9.35 rc1
The problem is that the motion handling part of the code is only done server-side. This includes setting the horizontal motion (X and Z) to 0 and reducing the vertical motion (Y) when the squid is not in water.