BTW, James Jacobs Creative Director Sep 14, 2012, 11:42 am
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James Jacobs
The part of the giant squid that grants it the ability to breathe water is its aquatic subtype. The part that makes it not able to breathe air is the lack of the amphibious quality.
A druid uses wildshape to turn into a giant squid functions as beast shape III.
Beast shape III does not grant the Aquatic subtype or the amphibious ability.
Beast shape III DOES allow the user to gain the squid's swim speed (although not at speed 90, the spell's max, but at speed 60, the squid's swim speed).
Now, looking back at the base polymorph rules on page 211, we see that, "if the form grants a swim...speed, you maintain the ability to breathe if you are swimming..." That means that while you're swimming, you can, essentially, breathe water. It does not remove your ability to breathe air if you normally breathe air.
Therefore, a STRICT by-the-rules reading in this case informs us that if you wildshape into a giant squid, you can breathe water ONLY WHILE SWIMMING (not if you're floating in the water, as if when stunned or paralyzed or unconscious), and can breathe air normally.
Frankly, that super-strict by-the-rules reading is wacky. I think that the easiest solution is to just allow the aquatic subtype to apply when needed, and to add amphibious to the list of powers granted. After all... that's the WHOLE INTENDED POINT of the various polymorph spells. If beast shape III can grant more powerful effects like blindsense, flight, poison, pounce, and the like... allowing it to also grant the Aquatic subtype and the amphibious special quality is hardly over-the-top. Of course... in that case, your giant squid WOULD end up having to hold its breath when fighting out of water or risk suffocation, but I think that's actually kind of cool and interesting.
(Bonus Round: The reason "amphibious" isn't mentioned on the beast shape lists is that the amphibious special quality didn't really gel and propagate into the Bestiary until very late... at a point AFTER the Core Rulebook was finalized. This is the same reason there's weird disconnects between how horses are presented in the two books, or why early printings of the Core Rulebook had a few weird errors on the summon lists.)