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.
Bare S100 CPU Replacement for ALTAIR 8800 IMSAI 8080 JAIR Single Board Computer
$42.00
MITS Altair 8800 Computer Bamboo Reproduction Arduino Tested Working Assembled
$649.99
MITS ALTAIR 8800 Original Vintage Microcomputer
$6000.00
Vintage SCCS Interface Microcomputer Magazine Pair 1976 IMSAI 8080 Altair 8800
$26.00
Altair MITS 8800 CPU Parts Kit not IMSAI 8080 S100 (board NOT included)
$64.95
S-100 backplane motherboard bare PCB 9 slot (for Altair/IMSAI)
$30.00
MITS ALTAIR 8800 Original Vintage Microcomputer S-100 Buy It Now $5999
$5999.00
MITS ALTAIR 8800 Original Vintage Microcomputer with 14 boards - Buy It Now
$9500.00
Vintage Altair 8088 CPU Wire Wrapped S100 Card w Mon EPROM circuit board #T71
$99.00
VINTAGE DEC 1975 VOL 1 ISSUE 1 SCCS INTERFACE MAGAZINE MITS ALTAIR COVER & ADS
$359.99