Squid signal by controlling chromatophores, pigment sacs in the skin opened by radial muscles. That works in daylight but not at 300 metres. Humboldt squid solve the problem by embedding photophores throughout the mantle musculature, producing a diffuse glow that the chromatophores then modulate, so the pattern reads as dark shapes on a lit body.
Remotely operated vehicle recordings analysed by Benjamin Burford and Bruce Robison documented squid cycling through distinct pigmentation patterns while foraging together, including rapid flickering and patterns that appeared before an individual made a strike. The researchers argued the display carries information between animals rather than simply reflecting arousal.
The word to avoid is language. The recordings show patterned, context-associated signalling, not a demonstrated syntax or vocabulary. It is also worth correcting the fisher nickname diablo rojo: the animals are not reliably aggressive towards divers, and reported attacks appear tied to fishing activity, injured conspecifics or hooked squid rather than unprovoked predation on humans.