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.
Vintage IBM 2-Button Roller Ball Mouse 13H6690 06H4590
$13.00
BlueSCSI V2 WiFi (Desktop) Modern Storage for Vintage Computers Latest Model
$53.50
VISIONEER Strobe 500 Mobile Duplex Color Scanner + Dock Station, Vintage
$34.00
Vintage AST 202377-001 J Motherboard (UNTESTED)
$75.00
BlueSCSI V2 WiFi (Narrow DB25) - Modern Storage for Vintage Computers
$51.50
Apple Vintage Graphite Keyboard And Mouse M2452 / M4848
$49.95
$10.00
Vintage Apple Macintosh IIsi PDS to NuBus Right Angle Adapter -- TESTED
$49.99
Vintage IBM Versatile Scroll Computer Mouse PS2 Wired 09N5513 New Sealed
$32.87
Vintage PCChips M326 V5.5 Motherboard AMD Am386 DX-40 40MHz 8x SIMM Baby AT
$89.99