I've already placed the reasoning on the BugTracker (which now houses the non-dialogue and place name information).
You see, the issue is this:
ノース (Noosu) North. FF7 uses ノルズ (noruzu)
You can already see that the kana is different. It's of course entirely possible that they took the English and mangled it (the argument against that is how different the kana is). As in, the actual name is based on North, but different to give a uniqueness to the Cetra's name for it. If that's the case, Knoll's (or Knolls') would be incorrect, even though it matches the kana they've used; and a better localization would be something close to North Pole, like Nord Pol (which is German for North Pole too). Something that allows an English person to see a North Pole influence, while not being the actual English. In either case, the Japanese writers made it clear that they definitely do not want North as a 1:1. And I have to go with likelihoods that Knoll's is what they meant.
Similarly, Pole is ポール and not ポル.
The reason it ended up Knowlespole in the original game is because Baskett was clever enough to see that it was too different to be North Pole - and so he conjured something up.
i'm debating this with Luksy.
Edit. OK after some discussion we are left with the following:
1. This is a unique, intended name (Knoll's Pol). Chance: Very possible.
2. This is a spelling mistake for North Pole. Chance: Very unlikely.
3. This is a deliberate alternation of North Pole. Chance: Very possible.
4. This is a unique, intended name (Nords' / Nord's Pol). Chance: Very possible.
I'd be VERY surprised if the original writer didn't intend 1, 3 or 4. Luksy is gunning for 3 and 4. I am on the fence with 1,3,4. I think given that Knoll means a small hill - I have to bite the bullet and consider it the more unlikely of the three. The question now is whether to use Nord Pol or Nord's Pol. Luksy noted that "Nords' / Nord's is also a match to the kana
This seems VERY promising.matches the kana...
Which seems to also be a very big indicator. http://www.etymonline.com/index.php?term=north
Edit. OK, I've decided. We're changing it to Nord Pol. The kana matching the old English / Norse for "North" - and those regions on Earth - clinches it for me.