Basic repaint test for squashed layers. The entire squashing layer should not need repainting when only a portion of it is invalidated. Test interactively by using --show-paint-rects and hovering over elements to change their color.

CASE 1, original layer tree:
{
  "bounds": [800, 600],
  "children": [
    {
      "bounds": [800, 600],
      "contentsOpaque": true,
      "drawsContent": true,
      "children": [
        {
          "shouldFlattenTransform": false,
          "children": [
            {
              "position": [60, 60],
              "bounds": [100, 100],
              "contentsOpaque": true,
              "drawsContent": true,
              "backgroundColor": "#808080"
            },
            {
              "position": [140, 140],
              "bounds": [260, 260],
              "drawsContent": true
            }
          ]
        }
      ]
    }
  ]
}
CASE 2, overlap1 changes color:
{
  "bounds": [800, 600],
  "children": [
    {
      "bounds": [800, 600],
      "contentsOpaque": true,
      "drawsContent": true,
      "children": [
        {
          "shouldFlattenTransform": false,
          "children": [
            {
              "position": [60, 60],
              "bounds": [100, 100],
              "contentsOpaque": true,
              "drawsContent": true,
              "backgroundColor": "#808080"
            },
            {
              "position": [140, 140],
              "bounds": [260, 260],
              "drawsContent": true,
              "repaintRects": [
                [0, 0, 100, 100]
              ]
            }
          ]
        }
      ]
    }
  ]
}
CASE 3, overlap1 and overlap2 change color:
{
  "bounds": [800, 600],
  "children": [
    {
      "bounds": [800, 600],
      "contentsOpaque": true,
      "drawsContent": true,
      "children": [
        {
          "shouldFlattenTransform": false,
          "children": [
            {
              "position": [60, 60],
              "bounds": [100, 100],
              "contentsOpaque": true,
              "drawsContent": true,
              "backgroundColor": "#808080"
            },
            {
              "position": [140, 140],
              "bounds": [260, 260],
              "drawsContent": true,
              "repaintRects": [
                [80, 80, 100, 100],
                [0, 0, 100, 100]
              ]
            }
          ]
        }
      ]
    }
  ]
}
CASE 4, overlap2 and overlap3 change color:
{
  "bounds": [800, 600],
  "children": [
    {
      "bounds": [800, 600],
      "contentsOpaque": true,
      "drawsContent": true,
      "children": [
        {
          "shouldFlattenTransform": false,
          "children": [
            {
              "position": [60, 60],
              "bounds": [100, 100],
              "contentsOpaque": true,
              "drawsContent": true,
              "backgroundColor": "#808080"
            },
            {
              "position": [140, 140],
              "bounds": [260, 260],
              "drawsContent": true,
              "repaintRects": [
                [160, 160, 100, 100],
                [80, 80, 100, 100]
              ]
            }
          ]
        }
      ]
    }
  ]
}
CASE 5, overlap3 and overlap1 change color:
{
  "bounds": [800, 600],
  "children": [
    {
      "bounds": [800, 600],
      "contentsOpaque": true,
      "drawsContent": true,
      "children": [
        {
          "shouldFlattenTransform": false,
          "children": [
            {
              "position": [60, 60],
              "bounds": [100, 100],
              "contentsOpaque": true,
              "drawsContent": true,
              "backgroundColor": "#808080"
            },
            {
              "position": [140, 140],
              "bounds": [260, 260],
              "drawsContent": true,
              "repaintRects": [
                [160, 160, 100, 100],
                [0, 0, 100, 100]
              ]
            }
          ]
        }
      ]
    }
  ]
}