Making Squared Words

Charcoal, 7 5 bytes

θ‖Ｏ↙↘

Try it online! Link is to verbose version of code. Edit: Saved 2 bytes thanks to @CarlosAlejo. Explanation:

θ       Print the input string, making the top row
 ‖Ｏ     Reflect with overlap...
   ↙    ... down and left, to create the left side
    ↘   ... down and right, to create the bottom and right sides

(Multiple directions to the Reflect command run consecutively rather than simultaneously.)

MATL, 20 16 11 bytes

otYTO6Lt&(c

Try it at MATL online!

EDIT: The code works in release 20.2.1, which predates the challenge. The link uses that release. (In 20.2.2 the code would be shorter, but it postdates the challenge).

Explanation

o     % Implicitly input a string. Convert chars to ASCII codes
t     % Duplicate
YT    % 2-input Toeplitz matrix
O     % Push 0
6L    % Push predefined literal [2, -1+1j]. When used as an index, this is
      % interpreted as 2:end-1 (indexing is 1-based)
t     % Duplicate
&(    % 4-input assignment indexing. This writes 0 at the square formed by
      % rows 2:end-1 and columns 2:end-1 
c     % Convert to char. Char 0 is shown as space. Implicitly display

Jelly,  29 22  17 bytes

Charcoal will trounce+d this score...

J⁶ẋa0,1¦"ṚṚ;$ṖŒḌY

A monadic link taking and returning a lists of characters; or a full program printing the result.

Try it online!

How?

J⁶ẋa0,1¦"ṚṚ;$ṖŒḌY - Link: list of characters, w     e.g. "whole"
 ⁶                - literal space character              ' '
J                 - range(length(w))                     [1,2,3,4,5]
  ẋ               - repeat                               [" ","  ","   ","    ","     "]
         Ṛ        - reverse w                            "elohw"
        "         - zip with:
       ¦          -   sparse application of:
   a              -     and (vectorises)
    0,1           -     to indexes: [0,1] (last and 1st) ["e","ll","o o","h  h","w   w"]
            $     - last two links as a monad:
          Ṛ       -   reverse                            ["w   w","h  h","o o","ll","e"]
           ;      -   concatenate                        ["w   w","h  h","o o","ll","e","e","ll","o o","h  h","w   w"]
             Ṗ    - pop (remove last entry)              ["w   w","h  h","o o","ll","e","e","ll","o o","h  h"]
              ŒḌ  - reconstruct matrix from diagonals    ["whole","h   l","o   o","l   h","elohw"]
                Y - join with newlines                   "whole\nh   l\no   o\nl   h\nelohw"
                  - if running as a full program implicit print