"Squeezing" a game object based on distance to another game object [duplicate]

Question

I am trying to "squeeze" a gameObject. When distance starts to be 6.98, execute this code: "The smaller the distance between gameObject1 and gameObject2, the thinner and longer this gameObject is". Somehow, this code has no effect. Why?

public Transform gameObject1;
public Transform gameObject2;

void Update ()
{
    float distance_squeeze = Vector3.Distance(gameObject1.position, 
                                              gameObject2.position);    
    if(distance_squeeze < 6.98F)
    {
        transform.localScale = new Vector3(-distance_squeeze, distance_squeeze, 1);
    }   
}

Answer 1

If I understand question correctly, you wish to reduce width(x scale) so that total area of object is maintained. In order to do that, when setting x scale you need to set y scale to 1/x.
Second part is finding the x scale. Please note that it is relative to object width:

float original_width = 6.98f; //no magic constants, this will pay off in long run
void Update () 
{
  float distance_squeeze = Vector3.Distance(gameObject1.position, gameObject2.position);  
  //note: you probably wanted to subtract gameObject2's witdth/2 here - you probably wanted distance from edge, not center
  float scale_x = distance_squeeze / original_width; //relative
  scale_x = Mathf.Min(scale_x, 1.0f); //do no stretch, equivalent to if(<6.98f)
  transform.localScale = new Vector3(scale_x, 1.0f / scale_x, 1.0f);
}

note: this assumes default scale 1.0f, for details see chat linked in comments.