I think that's too vague of a question. Is this position "correct" for the individual in question, i.e. does it allow proper movement of the knees and hips? Is this individual adequately flexible/mobile to squat properly consistently? Is this individual squatting within a smart program? If the answers to those questions are yes, then no, I don't think there are negative effects, and in fact squatting will be both protective and preventative in terms of injury and age related degeneration.
The main concern is people squatting improperly (poor movement, inflexibility, etc), too much (weight, frequency, volume) - not squatting itself. If it's done poorly, then yes, you have potential for wear and tear of the knees themselves, various ailments of the back, hips, etc.
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Squats and knee health?
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