What are the laws of squid ink?

Solution 1:

The affected racers are indeed of higher rank than the one who is using it. When you are first and use it, it will backfire and spray ink over your own screen. I don't know exactly how much blobs you'll receive, but the amount is higher if your rank is higher. So the first racer will be sprayed with more ink then number 10.

You can dodge it, with a mushroom or with a potted piranha plant. To remove it, wait a time (you'll obviously have discovered this), use a mushroom or drive over a boost pad.

In Mario Kart 8, the handling is a bit more slippery, although I didn't think it's very obvious. This was not present in previous games in the series.

Solution 2:

Squid only affects only the people racing ahead of the user. I haven't measured these for validation, but they're built on good hunches:

The amount of ink blots depends on the distance between the user and the target. If you're in 1st place you will get more ink blots from a 10th place squid user than from a 4th place squid user. I'm not sure of the break points but the minimum is 1 blot and the maximum is 3.

Duration of ink depends on your position in the race relative to the total amount of racers. First place in a 6 man race will receive ink for a shorter duration than 1st place in a 12 man race. If the last place uses a squid, the second-to-last will lose its ink almost instantly in a 12 man race but if you're 5 out of 6 it will take longer to go away.

I'd be very much interested in anyone who can disprove or quantify these claims.