It depends. If you lose a knot, it means you've misplaced it or you can't find it. If you loose a knot, you untie it. Many people pronounce both words the same, which is confusing. (Pronounce lose with a z sound at the end.)
Think of loose as the opposite of tight; lose refers to something you no longer have.
If I lose it, I don't have it;
if I loose it, I free it from restraint.