E.g.

skopeo copy --dest-compress --dest-compress-format=zstd dir:uncompressed-schema2 dir:dest

fails with FATA[0000] creating an updated image manifest: preparing updated manifest, layer "sha256:…": zstd compression is not supported for type "application/vnd.docker.image.rootfs.diff.tar"

because determineManifestConversion sees that all formats are accepted, and thinks that there is no reason to try anything but the source format.