I understand this isn't inline with traditional git scm, but it's a very powerful workflow if you are OK with some hybridization.
One minor nuisance that can come up with GitHub in particular when using a short reference like #123 is that that link breaks if the repo is forked or merged into something else. For that reason, I try to give full-url references at least when I'm manually inserting them, and I wish GitHub would do the same. Or perhaps add some hidden metadata to the merge commit saying "hey btw that #123 refers to <https://github.com/fancy-org/omg-project/issues/123>"
The gold standard is rebased linear unsquashed history with literary commits, but I'll take merged and squashed PR commits with sensible commit messages without complaint.