Plain English Meaning
A controller's instruction telling you to switch off the part of your transponder that sends your altitude to ATC, but keep the rest of the transponder running.
Full Definition
An ATC instruction directing a pilot to turn off the automatic altitude reporting feature of the aircraft's transponder, while leaving the transponder itself operating. Used when the altitude information being received by ATC is invalid or unreliable.
Context Anchor
Heard on the radio when a controller believes the altitude being received from your aircraft is wrong or unreliable.
Derivation
Squawk' is ATC slang for transponder operation, dating back to the World War II 'Parrot' identification system. 'Stop altitude squawk' literally means 'stop transmitting your altitude through the transponder.'