In another post, I have uploaded and documented a minirt init modification handling cloop and squashfs transparently for the user, just using cheatcode "squashfs". It's for pure 64-bits, but the modification for 32-bits is trivial.
IMHO, present day squashfs seems to be about as stable, efficient and versatile as we need for this kind of use, and its widespread and growing use indicates others think the same.
So, with a "uni-minirt", KNOPPIX may still be distributed as cloop image, but subsequent remasterings will not have to unpack minirt.gz to make modifications in order to turn to squashfs. I think lots of remasterers will prefer squashfs, as it gives (at least) slightly simpler and faster workflow with at least as good results. OTOH. I can't see anything right now forcing us to use squashfs.
And, just for the record: This is not about the practicality or usability of cloop per se, but about the actual Knoppix use case.
Dell Poweredge R630 2x Xeon E5-2680 v4 2.4ghz 28-Cores / 128gb / H330 / 2x 1TB
$279.99
Dell PowerEdge R620 Server - 256GB RAM, 2x8cCPU, 120Gb SSD/3x900Gb SAS, Proxmox
$320.00
R630 DELL 8 x 2.5'' POWEREDGE 2X E5-2680V4 32GB RAM IDRAC ENT & NDC 2X 495W PSU
$172.95
Dell Poweredge R730xd 3.5 2x E5-2690 v3 2.6ghz 64gb H730 14x Trays 2x 1100w
$489.99
DELL PowerEdge R730 16SFF Server 2x E5-2690v4 =28 Cores No RAM/ HDD H730 4xRJ45
$232.97
Dell PowerEdge R440 Intel Silver 4114 32GB PERC H730P 4-Bay 3.5" No HDD
$324.99
R630 DELL OEM 10X2.5'' 2X E5-2660V3 32GB RAM 2X750W PSU SERVER POWEREDGE
$159.95
Dell R630 Server 2x E5-2620 V4 2.1GHz = 16 Cores 128GB DDR4 2x 1Gb 2x 10Gb RJ45
$300.00
Dell Poweredge R730xd 3.5 2x E5-2683 v3 2.00ghz 128gb H730p 18x Trays 2x1100w
$689.99
R630 DELL 8 x 2.5'' POWEREDGE 2X E5-2680V4 128GB RAM IDRAC ENT & NDC 2X495W PSU
$259.95