That "install" produces a system that is chroot'd, and really not a very good general use system (it's for re-mastering to make your own version of Knoppix, mostly.)
... the HD-installation of Knoppix is an installation to HD like other OS (Debian, Ubuntu etc). The differences are among other things: no root password by default, no safety updates, only user knoppix.

You can chroot within this installation for remastering purpose, but is isn't chroot'd by default. Tell me, if I'm wrong.

Greetings Werner * http://www.wp-schulz.de/knoppix/summary.html
Own Rescue-CD with Knoppix (Knoppix V6.4.4 remaster)