Squishy was one of multiple Zygarde's captured by Flare Gang to be experimented on at their lab.
Mairin's Chespin (Chespie) managed to enter the room that it was being held in and interfered enough for it to escape but not before
Mairin's Chespin (Chespie) was critically injured. While on the run, it found its way into
Bonnie bag.
The Pokédex couldn't identify its species so
Bonnie decided to call it Squishy because it felt squishy. While attempting to flee from Flare Gang recapturing it, it transformed into its 10% Forme to protect itself from being captured.
Professor Sycamore was unable to identify the species as well.