Reflector platelets within squid chromatophores reflect light because they are nanofabricated photonic structures composed of proteins called reflectins.
“The cuttlefish, octopus, and squid are the undisputed champions of camouflage… They can instantly modulate their color, shading, patchiness, mottling or stippling, transparency, heat, and even bioluminescence, light-polarity, or iridescence.”
Read more about the shape-shifting abilities of cephalopods, including the bobtail squid, in Tamsin Woolley-Barker’s “Learning from the Master Shape-Shifter: Cephalopod Technologies” in Zygote Quarterly: