All Transports are considered squad upgrades. They are an upgrade to a SINGLE squad (per Wave Serpent, of course), and may interact with, as a transport, that squad only. Therefore, a Wave Serpent purchased as a transport (read: upgrade) for a squad of Howling Banshees may carry those Howling Banshees, and ONLY those Howling Banshees, even if they die.
Restrictions are, as stated, in the Codex (IE: Guardian squads may only take them if they meet the maximum squad size as stated).