List all posts in hierarchy and groupped by each taxonomy

These seems like it won’t perform well (you’ll probably want to add it some caching), but it works:

// Get all the terms for taxonomy.
$terms = get_terms( array(
    'taxonomy' => 'wpse416749',
) );

echo '<ul>';

foreach ( $terms as $term ) {

    // Get pages with the current term.
    $knowledges = new WP_Query( array(
        'post_type'      => 'knowledges',
        'posts_per_page' => -1,
        'no_found_rows'  => true,
        'fields'         => 'ids',
        'tax_query'      => array(
            array(
                'taxonomy' => 'wpse416749',
                'terms'    => $term->term_id,
            ),
        ),
    ) );

    // Get the ancestors for each page with current term.
    // Add ancestor IDs to array of page IDs.
    foreach ( $knowledges->posts as $post ) {
        $ancestors = get_ancestors( $post, 'knowledges', 'post_type' );

        if ( empty( $ancestors ) ) {
            continue;
        }

        $knowledges->posts = array_merge( $knowledges->posts, $ancestors );
    }

    // Ensure no duplicate IDs.
    $knowledges->posts = array_unique( $knowledges->posts );

    // Print the term's name.
    printf( '<li>%s<ul>', esc_html( $term->name ) );

    // List the pages in current term with ancestors.
    wp_list_pages( array(
        'post_type' => 'knowledges',
        'include'   => $knowledges->posts,
        'title_li'  => null,
    ) );

    echo '</ul></li>';
}

echo '</ul>';