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EROFS, like Squashfs, is a read-only file system. It can be used to store airootfs in an image file.

EROFS advantage is that it supports ACLs, unlike Squashfs.

This can be seen when creating airootfs.sfs with mksquashfs:

Unrecognised xattr prefix system.posix_acl_access
Unrecognised xattr prefix system.posix_acl_default
Unrecognised xattr prefix system.posix_acl_access
Unrecognised xattr prefix system.posix_acl_default

There have been attempts to add ACL support to squashfs, the latest patch ([v5,0/2] squashfs/squashfs-tools: Add posix acl support) is from 2019, but there seems to be no progress in merging them.

For reference, the files with ACLs:

/var/log/journal/
/var/log/journal/remote/

The only downside is that EROFS currently only supports LZ4 compression, but according to erofs-utils 1.1 release announcement, support for LZMA compression is being worked on.