Can Medium creatures squeeze into smaller spaces?

Here are the rules for “squeezing” from the SRD (the PHB text is identical; emphasis mine):

A creature can squeeze through a space that is large enough for a creature one size smaller than it. Thus, a Large creature can squeeze through a passage that’s only 5 feet wide. While squeezing through a space, a creature must spend 1 extra foot for every foot it moves there, and it has disadvantage on attack rolls and Dexterity saving throws. Attack rolls against the creature have advantage while it’s in the smaller space.

What does this mean for Medium-sized creatures? Small creatures take up the same amount of space in combat as medium creatures (5′ x 5′), so by RAW it would seem that Medium creatures cannot squeeze.

But that doesn’t seem right to me; after all, in real life people often fit into spaces that are 2.5′ or less. Does “large enough for a creature” mean something other than the space occupied in combat?