Extract A Squashfs To An Existing Directory

The source you link to tells you what you need to do:

The tool does not extract a squashed file system on already exsisting directory unless the -f option is specified.

So this should work

sudo unsquashfs -f -d /media/location1 /media/location2/file.squashfs

1. Mount the squashfs FILE.SQUASHFS :

   sudo mount -t squashfs PATH/TO/FILE.SQUASHFS /mnt
   

2. Copy his content to DIRECTORY (must exist) :

   sudo cp -av /mnt/. PATH/TO/DIRECTORY
   

3. Unmount the squashfs FILE.SQUASHFS :

   sudo umount /mnt