Most people can do full squats without issue. I see lot of patients who have patellofemoral pain with or without osteoarthritis. These folks have pain or irritation as the patella engages the trochlea of the femur. Patellofemoral joint (PFJ) contact really picks up right around 45 degrees. Quadricep forces double at 30 deg of flexion, triple at 45 degrees of flexion, and are 6x at 75 degrees of flexion.

Whether you are starting with knee flexed (like a leg extension) or knees straight (with a squat), you probably want to limit your bend to 45 degrees or so if you have PFJ pain and you are trying to off-load the joint during recovery. This will allow you to still strengthen the quad without causing more pain, and quad strengthening is one of the primary treatments of PFJ pain. For most people, over time, they can usually get to the point where they can do full squats with full weight. But initially they reduce their range to spare the joint.

What you are describing with good form is accurate, but doesn't solve the pain issue for most people with PFJ pain. It does work with some and I emphasize those points in clinic. But lots of people get benefit from continuing to do modified half squats. Probably not something to do with a lot of weight, but that's not the folks I am talking about.

I see tons of people who go through PT and never get better. Why? Because the therapist is often teaching them proper form, but is still having them perform full-chain quadricep exercises that cause further irritation of the PFJ.