The casual usage of the word is derived from the command "Hold, Squat" issued during the Jumpmaster Personnel Inspection (JMPI) sequence for combat equipped Paratroopers in the US Army. It is issued at the time in the sequence when the jumper is to lift his ruck, which is hanging at his waist, and squat down so that the Jumpmaster may inspect the underside of the ruck and parts of the parachute harness that would be obscured from view by the ruck.
Sergeant: "Yeah I'm all over that, tell them to hold squat."
Platoon Sergeant: "Hey did you send those guys out there to fix that fuckin' antenna?"
Section Sergeant: "Well we're in a hold squat pattern on that right now cause it's too dark and the wind is too high for them to fuck with it safely."