error: system does not fully support snapd: cannot mount squashfs image using “squashfs”: mount: /tmp/sanity-mountpoint-501893436: wrong fs type, bad option, bad superblock on /dev/loop0, missing codepage or helper program, or other error.
looks like your kernel misses support for squashfs …
have you checked /proc/filesystems (and perhaps lsmod) if squashfs is supported ?