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.
Intel Core i7-7700 3.60GHz Quad-Core CPU
$38.87
AMD Ryzen 9 7900X3D Gaming Processor - 12 Core And 24 Threads - 5.60 GHz Max Boo
$349.99
AMD Ryzen 5 5600X 6-core 12-Thread Desktop Processor AVZ9
$104.99
Intel - Core i5-14600K 14th Gen 14-Core 20-Thread - 4.0GHz (5.3GHz Turbo) Soc...
$306.99
Intel Core 2 Quad Processor Q9550 2.83GHz 1333MHz (SLB8V)
$12.50
Intel Core i5-10600 SRH37 3.3GHz 6-core CPU Processor
$89.99
AMD Ryzen 5 7600x Processor (5.3 GHz, 6 Cores, LGA 1718/Socket AM5) NEW OEM Tray
$169.98
SR1XP Intel Xeon E5-2680 v3 12 Core 30MB 2.5GHz LGA 2011-3 Grade A Processor
$3.97
Intel Core i9-10900K Processor (5.3 GHz, 10 Cores, Socket LGA1200, Tray) -...
$280.00
(Lot of 9) Intel Core i7-4790 3.60GHz LGA1150 SR1QF Processors #27
$264.99