We report on nonlinear squeezing effects of polarization states of light by harnessing the intrinsic correlations from a polarization-entangled light source and click-counting measurements. Nonlinear Stokes operators are obtained from harnessing the click-counting theory in combination with angular-momentum-type algebras. To quantify quantum effects, theoretical bounds are derived for second- and higher-order moments of nonlinear Stokes operators. The experimental validation of our concept is rendered possible by developing an efficient source, using a spectrally decorrelated type-II phase-matched waveguide inside a Sagnac interferometer. Correlated click statistics and moments are directly obtained from an eight-time-bin quasi-photon-number-resolving detection system. Macroscopic Bell states that are readily available with our source show the distinct nature of nonlinear polarization squeezing in up to eighth-order correlations, matching our theoretical predictions. Furthermore, our data certify nonclassical correlations with high statistical significance, without the need to correct for experimental imperfections and limitations. Also, our nonlinear squeezing can identify nonclassicality of noisy quantum states which is undetectable with the known linear polarization-squeezing criterion.