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.
Lenovo M70q Gen 2 USFF Core i9-10900t - 8GB RAM - 128GB SSD - NO HDD
$295.55
HP EliteOne 800 G4 24" Touch AiO 8GB RAM 256GB SSD 3 GHz i5 Win11 Pro Grade A
$214.99
Dell Optiplex 5040 MT Core i5-6500 3.20GHZ 8GB RAM 256GB SSD Win 10 Pro WiFi
$89.99
HP Z420 Workstation Xeon E5-2690 v2 3ghz 10-Cores 64gb 240gb SSD 1TB Win10
$199.99
NEW OEM Tray AMD Ryzen 7 5700X 8-Core 16-Thread 3.4GHz Socket AM4 CPU Processor
$149.00
Intel Xeon E5-2667 v2 SR19W 3.30GHz 25M 8GT/s 8-Core LGA2011 CPU Processor
$24.99
Apple Mac Pro Processor Tray 5,1 2010 2012 2.4ghz 8 core
$79.99
Intel Xeon CPU E5-2620 V4 2.10GHz 20MB Cache 8 Core LGA2011-3 Processor SR2R6
$3.79
Dell OptiPlex 3060 MT Core i5 8th Gen 16GB Ram 480 GB SSD Windows 11 Computer
$239.00
Custom Gaming Desktop PC Intel i7 Quad 16 GB SSD + 1 TB AMD Radeon RX 580 8 GB
$409.00