It was a cool little way to experiment with Klonoa's initial run, because handheld consoles like the Wonderswan were a huge deal in Japan, so it made sense from a business perspective.
Unfortunately the game itself is quite an acquired taste, much like original Gameboy games. I've only seen it through an Exo review, which is probably all I need to know about it because I can't see myself ever being able to play it outside of emulators.
But the story was an interesting change of pace conpared to the PS1 game, despite taking some strange liberties with continuity. This odd trend would only continue into the rest of the Klonoa handheld games, and to this day we can only speculate if the stories told there might have been strange intermittent dreams that our favorite cabbit just so happened to have between the main titles.