Would be cool if it could also de-knit to modify clothing or reuse later. I.e if there is a hole: automatically deknit, splice in a replacement and fix it. Or if your belly growth: deknit and make that section slightly wider.

And can you use finer yarn as well, like lace? The reason a sweater is knit like it is, is because of the tradeoff between knitting time and material needed. But if labor becomes free, you should be able to knit much bigger yet more delicate stuff.

Edit: ah, deknitting is called frogging