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.
Juniper Networks EX3300 EX3300-48P 48-Port Gigabit PoE+ Switch
$37.41
Juniper Networks EX3300 EX3300-48P PoE+ 48-Port 4x SFP Gigabyte Ethernet Switch
$59.99
Juniper EX3300-48P 48-Port 10/100/1000BASE-T (48 PoE+ ports) with 4 SFP+
$74.00
JUNIPER EX3400-48P 48x 1GB PoE+ RJ-45 4x 10GB SFP+ 2x 40GB QSFP+, DUAL AC POWER
$168.00
Juniper EX4200-48PX 48-PORT 10/100/1000BASET PoE Ethernet Switch
$50.00
Juniper EX4500-40F-BF-C 40-Port 10Gbe SFP+ Switch
$124.99
Juniper Networks SRX650 Service Gateway Firewall Appliance W/ 2x PWS
$53.79
Juniper Networks SRX320-POE 6-Port Service Gateway Security Appliance Tested
$149.99
(2) Juniper Networks EX2300 (EX2300-48P) 48 Ports Ethernet Switch+ Power Cord
$500.00
Juniper QFX5120-32C-AFI Juniper 32x 100GB QSFP28 Back-to-Front Airflow Switch
$4475.00