Select Enable ARQ then Enable KISS then back to ARQ IO in the IO configure panel. This should fix your issue. The problem and fix have been confided by others and the next point release will fix the issue.
From: "firstname.lastname@example.org [linuxham]" <email@example.com>
Sent: Monday, October 20, 2014 11:26 AM
Subject: [linuxham] fldigi 3.22.00 issue
for me the squelch doesn't work.