My dog was squeezed and yelped. Are her breathing issues permanent?

Oh no, poor B! If she is breathing funny, then I would be very concerned that he has already caused her problems and depending on how often he does it and how hard he squeezes her, there is a chance there could be very serious problems resulting from this. If he's done it enough and severely injured her, there could be the possibility the results may be permanent. B needs to see a vet tomorrow to determine if she has suffered any damage from this behavior and can discuss treatment options with you.

On a serious note, what your roommate is doing could potentially be deemed animal abuse if he is hurting her, and I would not leave B alone with your roommate if you can't trust he won't stop this behavior. It's not a funny thing to do to a dog, and as I said above, it's very concerning that she is breathing funny from this. He needs to stop it now, and B should never be left unsupervised with him if you can't trust him. I hope this helps.