If you are not getting into the squat position correctly – i.e. you are not squatting correctly, then yes knee irritation can occur.
However if you are squatting correctly, damage or irritation should not occur.
1 exception comes to mind: If you have injured tissue – going through the squatting motion and sitting in the squat position could produce pain. But in this case, you should be moving in a manner that is appropriate for the condition of your body. So don’t squat if you’re injured.