This is one of the easiest variations to learn to squat with. I use this very much with my newer athletes.
The great thing is that holding the KB up also works some of the upper back, shoulders and biceps.
If the elbows stay in tight, you can really sink low. This was actually one of the methods / movements I used to help improve my knee ROM after getting ACL reconstruction.
This is going to be more of a RE movement for most, but for some it might be SE.
You can even do jump squats & jump lunges from this position.