(Sorry, only seeing this now as I don't check here very often.)
The new (non-NBFM) squelch function only effects the browser. Like the mute button.
But kiwirecorder connections are coming in on a different channel than a browser connection. So there wouldn't be any interaction anyway. There has been a suggestion that a muted channel should stop sending audio to the browser to save network bandwidth. But even if that were implemented it still wouldn't effect kiwirecorder connections.
Kiwirecorder has its own squelch setting that pauses recording to the file to save space.