This is because of the following, unlike ext4, you can simply expand the partition, I myself don't even know how to expand the squashfs partition, based on quick search, this came up: Expanding OpenWrt squashfs image (SDcard) - #31 by wtuppa but maybe @pythonic has a better solution other than compiling from source?
This disk image uses the traditional OpenWrt layout, a squashfs read-only root filesystem and a read-write partition where settings and packages you install are stored. Due to how this image is assembled, you will have less than 100MB of space to store additional packages and configuration, and extroot does not work. It supports booting from EFI.