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.
1080p Gaming PC Intel Inside 8 core WI-FI 5G 32GB RAM SSD RX 56006GB W/Monitor
$409.50
Dell OptiPlex 3060 MICRO DESKTOP PC COMPUTER I5 8TH GEN UP TO 32GB UP TO 2TB M.2
$350.00
Dell 14" TOUCHSCREEN IntelQuadCore 16GB RAM up to 512GB SSD Fingerprint BT Win11
$235.00
HP Workstation Z640 2x Xeon E5-2623V4 32GB Ram 2x256GB SSD Quadro K420 NO OS GA
$164.98
Intel Core i7-12700KF - Alder Lake 12-Core (8P+4E) 3.6GHz LGA 1700 125W CPU
$183.99
iMac 24 Blue 2021 3.2 GHz M1 8-Core CPU/GPU 16GB RAM 1TB SSD Excellent w/ Bundle
$1495.00
AMD Ryzen 7 7800X3D 8-Core - 16-Thread 4.2 GHz (5.0 GHz Max Boost) Socket A...
$304.95
Intel - Core i5-13600K 13th Gen 14 cores 6 P-cores + 8 E-cores 24M Cache, 3.5...
$314.99
HP VICTUS 15L TG02-0009 Gaming DT Ryzen 5 5600G 512GB 12GB RTX 3050 W11
$459.99
Lot of 3 HP Prodesk 600 G3 DM - Intel Core I5 7th Gen. 8GB w/ Chargers - NO SSD
$125.00