I have been testing that further, and found an interesting behavior. Without any LU-16524 patches applied, it is not possible for a squashed root to mount the client if the squash uid or gid does not exist on server side, when SELinux is enabled on the client (either Permissive or Enforced). This is because the client will issue a getxattr request for security.selinux, and on server side user credentials are checked for a getxattr.
With LU-16524 patches applied (especially #50184), even when SELinux is not enabled on the client, it is not possible for a squashed root to mount the client if the squash uid or gid does not exist on server side. This is because patch #50184 adds a user credentials check on getattr.
So I agree patch #50184 introduces a behavior change (only when SELinux is not enabled on the client), but I am not shocked to proceed to a user credentials check on getattr. Moreover, it is questionnable to mount a client as a mis-configured root (a squashed root with its squashed uid or gid that does not exist on server side), given that no further operation is possible on the file system. I would tend to think this is a nodemap configuration error and it should not be supported.
You are right, this would be somewhat the opposite approach, with the benefit that it would "grant" select privileges to the tenant admin, starting from "nothing" that the regular user has, so would be more "fail safe". The current approach will take away privileges from a root user, but risks that something was missed, or is added in the future that does not add RBAC roles/checks and cannot be squashed/removed.
That said, it definitely belongs in a different ticket so that this one can be marked resolved..