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 8SFF Server 2x E5-2650v4 2.2GHz =24 Cores 32GB H730 4xRJ45
$242.00
Dell PowerEdge R420 Dual Intel Xeon E5-2440 v2 @1.90GHz 32GB RAM No HDD H710
$74.50
Dell PowerEdge R620 Server - 256GB RAM, 2x8cCPU, 120Gb SSD/3x900Gb SAS, Proxmox
$320.00
Dell Poweredge R210 II Server Xeon E3-1220 v2 3.1ghz Quad Core / NoRam / 1x Tray
$69.99
R630 DELL 8 x 2.5'' POWEREDGE 2X E5-2680V4 32GB RAM IDRAC ENT & NDC 2X 495W PSU
$172.95
DELL PowerEdge R730 16SFF Server 2x E5-2690v4 =28 Cores No RAM/ HDD H730 4xRJ45
$232.97
Dell PowerEdge R330 Xeon E3-1220 v5 3.0GHz 32gb H330 2x 3.5" Trays SVR 2012
$189.99
Dell Poweredge R730xd 3.5 2x E5-2690 v3 2.6ghz 64gb H730 14x Trays 2x 1100w
$489.99
Dell Poweredge R630 2x Xeon E5-2680 v4 2.4ghz 28-Cores / 128gb / H330 / 2x 1TB
$279.99
Dell Poweredge R730xd 3.5 2x E5-2683 v3 2.00ghz 128gb H730p 18x Trays 2x1100w
$689.99