i don't think it's RKN. RKN doesn't take down tree that fast. if the roots are dying out, there should be another reason. i grow my trees in nursery pots, i used to use other plastic containers, but it's just easier for me to handle them. never tried those cloth pots yet. once my trees are at least 1 yr old, i routinely hose them frequently. once the day temp hits 80 and over like last couple of days, some of them get water twice a day. the roots should be hardy enough that they won't rot or die too quickly unless somehow water is not draining and they are sitting in the water. but from what you have said that doesn't seem like the issues.
my understanding of cloth pots are that they promote air root pruning and that should prevent roots circling the pot. but won't they still compress the soil and get "root bound"? what i mean is, root mass will be great enough that water might not get to the center of the root mass?
last yr, i saw my older trees getting dried up rather quickly early in spring. the water seems to be getting to the root, but the leaves were drying up and all the breba were dropping. so i took one out and cut into the root mass and sure enough, only the outside of the soil/roots were getting wet. the inside of the root ball was very dry. i gave them all major root pruning this yr, gave them emergency pruning last yr, and i aerate the soil once a month with 12" screw driver. they seem to be doing better now days.