Do depot stations prevent bandit spawns? It says they do but I found 4 squads in a system with a depot Station and I'm wondering if they are just remnants from before it was built that never despawned or what. System has been empty for weeks at least before I found them.

Yes, Depot Stations prevent respawning. So the bandits most likely did appear when you where constructing the station?

The Rules section for this one:

Space bandits spawn between 2 and 4 squadrons when a player enters an asteroid field that meets the following conditions:

There are no existing bandits in the asteroid field.
There are no players already in the asteroid field.
There are no space stations other than asteroid hideouts in the asteroid field.

I hope this helps, kind regards

Rillik