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.
Cisco Catalyst C9300-24UX-A 24 Port 10G/mGig UPOE Network Switch + NM-8X Module
$579.97
Cisco Nexus 96-Port 10G SFP+ Switch N9K-93128TX w/ 9K-M12PQ 12-Port 40G QSFP
$149.99
LOT OF 20 Genuine Cisco SFP-10G-SR V03 10GBASE-SR SFP+ Transceiver Module
$95.00
Cisco Catalyst C9300-24UX-A 24 UPOE Switch 90 Day Warranty
$324.00
Genuine Cisco SFP-10G-SR V03 10GBASE-SR SFP+ Transceiver Module 10-2415-03
$8.00
Cisco C3850-NM-4-10G 4 Port Network Exp.Module for 3850
$148.99
Cisco C3850-NM-2-10G 2 Port Network Exp.Module for 3850
$32.90
Cisco C9200L-48T-4G-E Catalyst 9200 48-Port GE 4-Port SFP Network Essentials
$740.00
Cisco IE-1000-8P2S-LM Industrial Ethernet Switch New Sealed
$1100.57
Cisco Catalyst C9300-24UX-A 24 Port 10G/mGig Copper UPOE Network Switch
$499.00