This is fusecloop, FUSE mounter for Knoopix's cloop compresed images
It allows to access filesystem in KNOPPIX image completely from FUSE:

mkdir ~/mnt/kn1
touch ~/mnt/kn2
mkdir ~/mnt/kn3
~/bin/mountlo -o ro ~/knoppix.iso ~/mnt/kn1
~/bin/fusecloop ~/mnt/kn1/KNOPPIX/KNOPPIX ~/mnt/kn2 -o nonempty
~/bin/mountlo -o ro ~/mnt/kn2 ~/mnt/kn3

It works for me:
cat ./typescript

Note: it is my the first published FOSS project