The squirting is due to the compensating port allowing the fluid under pressure in the lines to return to the reservoir when the pedal is released. This is the small hole drilled just behind the main fluid port in the bottom of the reservoir.
When the master cylinder piston returns to the fully released position, the front edge of the rubber cup on the piston ends up just behind this port, allowing the pressurized fluid back into the reservoir. Due to the small diameter of the port, the fluid squirts. There may also be a momentary squirt of fluid from the port when the pedal is first depressed, which is normal.
Is the MC cap rectangular and retained by a bolt? There should be a vent hole in the gasket, which may be directly over the compensating port. Try reversing the position of the gasket so the vent hole is no longer aligned with the squirting fluid.
Does it have power brakes? If so, check the vacuum line connected to the intake manifold for the presence of brake fluid. If the rear seal on the master cylinder is leaking, fluid may be getting sucked past it, into the booster and then into the intake manifold. This can empty the reservoir pretty quickly.