Fix merges not working when project is not licensed for squash

Closes #3321

app/controllers/projects/merge_requests_controller.rb

@@ -305,7 +305,7 @@ class Projects::MergeRequestsController < Projects::MergeRequests::ApplicationCo
       return :failed
     end
 
-    merge_request_service = MergeRequests::MergeService.new(@project, current_user, merge_params)
+    merge_request_service = ::MergeRequests::MergeService.new(@project, current_user, merge_params)
 
     unless merge_request_service.hooks_validation_pass?(@merge_request)
       return :hook_validation_error
@@ -313,7 +313,7 @@ class Projects::MergeRequestsController < Projects::MergeRequests::ApplicationCo
 
     return :sha_mismatch if params[:sha] != @merge_request.diff_head_sha
 
-    @merge_request.update(merge_error: nil, squash: merge_params[:squash])
+    @merge_request.update(merge_error: nil, squash: merge_params.fetch(:squash, false))
 
     if params[:merge_when_pipeline_succeeds].present?
       return :failed unless @merge_request.head_pipeline

changelogs/unreleased-ee/sh-fix-squash-when-not-licensed.yml

+---
+title: Fix merges not working when project is not licensed for squash
+merge_request:
+author:
+type: fixed

spec/ee/spec/controllers/projects/merge_requests_controller_spec.rb

@@ -293,6 +293,13 @@ describe Projects::MergeRequestsController do
 
           expect(merge_request.reload.squash).to be_truthy
         end
+
+        it 'merges even when squash is unavailable' do
+          stub_licensed_features(merge_request_squash: false)
+          merge_with_sha(squash: '1')
+
+          expect(merge_request.reload.squash).to be_falsey
+        end
       end
 
       context 'when squash is passed as 0' do