The reason why toddlers squat when they poop their diapers is because it's easier for bowel movements to occur when squatting.
Squatting is a natural way of relaxing the pelvic floor muscles and helps to make the poop come out easier.
Squatting is the toddlers or child's natural instinct when they poop in their diapers.
Not all toddlers will always squat when they poop their diaper although it's a common behavior that is associated with the natural pooping posture, which is similar to what is observed in man cultures.
Squatting is the more natural position and more efficient position for pooping because squatting opens up the rectum more fully.
Squatting when pooping also helps to relax the muscles of the pelvic floor, which makes it much easier to poop.
Toddlers might also squat instinctively as they learn to control their bowel movements and it can also be a sign of readiness for potty training as the toddler starts to associate squatting with pooping.
Some toddlers also hide or squat in a corner when they poop their diapers, which can also be a step towards the toddler developing privacy and awareness for potty training.
Squatting when pooping is a combination of natural instinct as well as developing of bodily awareness as the toddle navigates the process of pooping while they are still in diapers.