"when you do something" or "when you are doing something"?

You are bending too much when you are squatting.

In the above sentence, bend is a dynamic verb. This sentence is said in reference to the time when the person was doing the squats, though his coach says it when he is done squatting. So it can come like it is referencing to a habitual action, but the right term to use is dynamic verb implication. This can be a one time thing as well.

You bend too much when you are squat.

This is the general sentence which right away determines the habitualness of the activity.

This Grammarly article might help you in future.

Honestly, native English speakers aren't always the best examples for perfect grammar all the time. While past tense may technically be correct, in most cases squatting would continue after the advise, so the action may not actually be finished.

Either way, from personal experience I think that the present continuous is a better choice. In this case, the past tense example seems more harsh and impersonal then it needs to be, which should be avoided in the specific training context given for these phrases.