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Loops were planned on being implemented in Chaotix, even being present in prototypes... yeah, I can see why they were removed (footage provided by @mdtravis.bsky.social)

Small fun fact, there's an unused sprite in the final build that would have acted as a sprite mask by drawing on top of the character sprites, but set to use a low priority color so that it would appear behind the loop, which is drawn by the Genesis.

There's a ROM hack of Chaotix called Knuckles' Clackers by GenesisDoes that reimplements loops, and even uses the masking sprite... but it still illustrates the problematic nature of loops with the tethering mechanic.