Those green, C-shaped "caterpillars" skeletonizing your Knockout rose leaves are rose sawfly larvae. They're not true caterpillars (they have 6+ prolegs), so B.t. won't work.
Monitor closely in spring; early intervention prevents severe defoliation.
See Sawfly Identification for more photos.

sawfly damage


sawfly damage

curled rose slug (sawfly)
Managing Sawfly Larvae on Roses: Identification and Control
Rose Cane Galls: Bacterial Tumors on Stems
Identifying a 27-Year-Old Deep Red Rose in Zone 4
Why Your Roses Aren't Blooming: Troubleshooting Tips for High-Altitude Gardens
Rose Shoots from Old Transplant Sites—Suckers or Original?
Effective Organic Control of Rose Slugs (Sawfly Larvae) on Rose Bushes
Why Do Rose Buds Bend and Break? Identifying Rose Midge Damage
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Protecting Roses from Squirrels, Rabbits & Deer: Dog-Safe Deterrents
Managing Rose Cane Borers: Identification and Control
Identifying 'Innocence' Rose: Size and Naming Issues
Hibiscus Sawfly: Identifying and Controlling the Lace-Like Leaf Damage
Hibiscus Identification & Care: Tropical, Hardy & Confederate Rose
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