loc_21818: move.w ($FFFFB018).w,$30(a0) move.w ($FFFFB062).w,$32(a0) moveq #0,d1 move.b 7(a0),d1 addi.w #$B,d1 ...When a breakable wall is marked Knuckles-only, control is deferred to loc_21818, at first identical to loc_21568, which we've studied before. The interesting bits start at loc_21862, where we check whether the wall should break.
loc_21862: lea (Player_1).w,a1 move.w $30(a0),d1 move.w d6,d0 andi.w #1,d0 beq.s loc_218B0 cmpi.b #2,$38(a1) bne.s loc_218B0 bclr #5,$2A(a0) bsr.s sub_218CE btst #6,$2A(a0) beq.s loc_2185C lea (Player_2).w,a1 cmpi.b #2,$38(a1) bne.s loc_2185C ...Notice that everything but the Knuckles character ID check is gone, and that an identical check is now also performed on player 2's SST. Perhaps at one point, Knuckles-only walls were considered for Competition mode.
When the wall does break, an interesting piece of code runs over at loc_218EE. It does another character ID check for Knuckles (paranoid much?), and then checks if the double jump flag at $2F(a1) is set to 1.
loc_218EE: move.w $18(a1),$1C(a1) bclr #5,$2A(a1) cmpi.b #2,$38(a1) bne.s loc_21928 cmpi.b #1,$2F(a1) bne.s loc_21928 move.b #2,$2F(a1) move.b #$21,$20(a1) bclr #0,$2A(a1) tst.w $18(a1) bpl.s loc_21928 bset #0,$2A(a1) loc_21928: ...If both of those check out, then it means the wall was broken by a gliding Knuckles, and the object forces Knuckles out of the gliding state by setting the double jump flag to 2 and Knuckles' animation to $21, which is the falling-from-gliding animation. This is interesting because regular breakable walls don't have this bit of code, so Knuckles will happily glide right through a bunch of them.
It also turns out the rocky walls from Angel Island Zone and Lava Reef Zone are actually a different object, which does contain this code, so the fact that it's missing from the standard breakable wall object is possibly an oversight.