Apparently in the States they must rear face until they are 12 months but 2 years is recommended. I think to myself......wouldn't it get a bit squashy for their legs?
Yes that's true. No it's not squishy for their legs. There are also no recorded leg injuries to children rear-facing in accidents. Actually the opposite is true there are often leg injuries in forward facing children.

Kids rarely sit with their legs neatly out in front, they cross them when playing on the floor or fold them under. RFing kids generally rest their legs up on the back seat, cross them or dangle them over the edges if there's no other seats next to them. It is completely safe.

In Sweden children RF until 4 years, they have the lowest death rate in the 0-10year age group for car accidents. They've had about 5 in the last 40 years, that says something I think.