Very happy to see matchmaking being addressed, Rattati. :)

Regarding how much squad size effects the squad Mu multiplier, I feel that there is (as others have pointed out) a geometric growth for how many people are in the squad, but only for the first several members.
That is to say, while the value from the 4th player is a lot more than the 3rd player, a 6 person squad is only a bit better than a 5 person squad.
(Keep in mind I mean this as "How good is a 6 person squad vs a 5 person squad with a 6th unsquaded player of same skill in Team?").

If I had to guess at the curve, it'd be something like this:

(100-¦ level players, for easy math)

Sqd count x 100-¦ = Total squad -¦ = -¦ per member = -¦PM difference between tiers
1 x 100-¦ = 100-¦ = 100-¦ = ...
2 x 100-¦ = 240-¦ = 120-¦ = 20-¦
3 x 100-¦ = 450-¦ = 150-¦ = 30-¦
4 x 100-¦ = 800-¦ = 200-¦ = 50-¦
5 x 100-¦ = 1150-¦ = 230-¦ = 30-¦
6 x 100-¦ = 1500-¦ = 250-¦ = 20-¦


My presumption about the underlying dynamic is less that the 6th person isn't useful, and more that there is a critical-mass event at about 4 people.
2-3 people in squad is just a voice chat for buds playing a game. But at 4-5 people, the squad firstly has enough people to have a mixed-arms/mixed-roles effect, and secondly has a moral boost (players stop "playing for fun" and start "playing to win").

A final note: I'd postulate there's a sliding scale to when the "squad effect" happens, depending on player skill.
Like, I've seen vets become M'F'ers as early as 3 people; while newbies seem to sometimes need 5 or even 6 people before any large benefit from the squad shows.


This is all gut-think/experienced-guess, though; I have no idea what the metrics show. :\