The real axis: freedom vs coherence
Wix gives a free-form editor, anything anywhere, which means anything breakable anywhere. Squarespace gives structured templates, hard to make ugly, impossible to make unusual. Neither is a lesser product; they are different bets about what owners will value more: control or restraint.
Pick Wix when
Layout needs are unusual (landing-page-heavy marketing, specific funnels), the app market's breadth matters, budget tiering matters (entry price lower), or the owner enjoys editing and will do it constantly. Wix's ceiling is taste; with discipline it gets far.
Pick Squarespace when
Brand polish is the differentiator (photo-led businesses, events, hospitality), the page set is classic (home/about/services/contact/store), and the editor will be touched rarely, by a non-technical owner who must not be able to break alignment at midnight.
What both share (the honest fine print)
Both are closed platforms: the site lives on their servers, under their rules, priced monthly forever. Both make the exit a rebuild. Both suit businesses that will never need custom application logic, and neither is the right home for real commerce depth, memberships, or product software. That line, not brand preference, is the decision.
Beyond the line
If you have outgrown either, the standard path is a planned move to WordPress (from Wix, from Squarespace, both routine) or to custom where the product demands it. If you are choosing fresh and the business is honestly small-web, pick by editor taste and move on, the difference between these two is smaller than the difference between a finished site and an unfinished one.